21. Political Economy branch of Economics deals with the relationship between Economics and politics or political theory the economist cannot operate in a world that is divorced from the real world the economist in making his recommendations must be aware of their feasibility within a given political system Communist Anarchy Monarchy Sultanate Feudal Theocracy it would be futile for an economist to recommend complete abandonment of farm support programs/tariffs if dominant political sentiment was against such measures
22. Normative Economics the relationship between Economics and Ethics ETHICS value Judgments good/bad right/wrong philosophers analyzes the reasons why people consider a particular policy is bad and another policy as good HEDONIST STOICS economic policy which yields the greatest good for the greatest number of individual is right material objects are neither good or bad
23. Economist he can help the society/individuals make judgments concerning good and bad economic policies by pointing out the consequences of the policies consequences of a more equitable distribution of income economic policies concerning taxes profits = large segment of population earning low incomes and a small segment of population earning very high incomes
24. TAX sales places a relatively greater burden on the low and middle income groups than on the high income groups he may also determine the conditions under which a tax is either evaded or passed on to someone else determine whether the corporate income tax is paid by the stockholders or by the consumers
25. but the final judgment concerning whether the consequences of a certain policy are good or bad is made by society and not by the economist
26. Assignment Formulate your own hypothesis/theory in relation to the Philippine Economy. Prove it by following the steps in the Methodology of Science