Google
Saturday 
May 8, 2021 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
FCC: The abbreviation for the Federal Communications Commission, which was established by the Communications Act of 1934 and is charged with regulating interstate and international communications by radio, television, wire, satellite and cable. The FCC consists of five Commissioners appointed by the President and confirmed by the Senate. Each commissioner serves a 5-year term, except when filling an unexpired term. One of the regulatory forces in the marketing environment.

Visit the GLOSS*arama


FALLACY OF DIVISION:

The logical fallacy of arguing that what is true for the whole is also true for the parts. In the study of economics, this takes the form of assuming that what works for the aggregate, or macroeconomy, also works for parts of the economy, such as households or businesses. The contrasting fallacy is the fallacy of composition.
The fallacy of division, together with the fallacy of composition, highlights the difference between macroeconomics and microeconomics. Macroeconomics operates according one set of laws and principles, while microeconomics operates according to another set. Assuming what works for the aggregate economy also works for parts of the economy leads to the fallacy of division.

For example, during economic bad times (recession), the appropriate action for the Federal government (as "caretaker" of the aggregate economy) is to increase spending and reduce taxes. A recessionary period is not the time for government to act prudently, to save, to set aside extra funds for a rainy day.

However, should a family or business try to operate in a similar manner, then they are bound to encounter problems, and to commit the fallacy of division. Saving less and spending more during a recession can be disastrous at the microeconomic family level.

The aggregate economy is a complex system comprised of smaller microeconomic components. An analogy is the human body. Individuals and firms make up the aggregate economy like cells and molecules make up the human body. Rules that apply to entire body do not apply to the cells. Rules that apply to entire macroeconomy do not apply to the firms, households, markets, and industries.

What is true at the macroeconomic level is not necessarily true at the microeconomic level. What is true for the whole is not necessarily true for the parts.

<= FALLACY OF COMPOSITIONFALLACY OF FALSE AUTHORITY =>


Recommended Citation:

FALLACY OF DIVISION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: May 8, 2021].


Check Out These Related Terms...

     | fallacies | fallacy of false cause | fallacy of personal attack | fallacy of mass appeal | fallacy of false authority | fallacy of composition |


Or For A Little Background...

     | scientific method | economic thinking | political views | government functions |


And For Further Study...

     | seven economic rules | four estates | macroeconomics | microeconomics | sixth rule of ignorance | seventh rule of complexity | normative economics | economic science |


Search Again?

Back to the WEB*pedia


APLS

BEIGE MUNDORTLE
[What's This?]

Today, you are likely to spend a great deal of time flipping through the yellow pages hoping to buy either a box of multi-colored, plastic paper clips or several orange mixing bowls. Be on the lookout for gnomes hiding in cypress trees.
Your Complete Scope

This isn't me! What am I?

More money is spent on gardening than on any other hobby.
"Adversity is another way to measure the greatness of individuals. I never had a crisis that didn't make me stronger. "

-- Lou Holtz, Football Coach

FASB
Financial Accounting Standards Board
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2021 AmosWEB*LLC
Send comments or questions to: WebMaster