An example of a positive statement is:
A) The rate of unemployment should be 4 percent.
B) A high rate of economic growth is good for the country.
C) an increase in investment spending tends to reduce unemployment.
D) Everyone in the country needs to be covered by national health insurance.
Ans: C) an increase in investment spending tends to reduce unemployment.
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In the classical theory of growth, what is the final outcome of an increase in growth and labor productivity?
What will be an ideal response?
The original work on the application of the time inconsistency problem in macroeconomics is due to
A) Milton Friedman and Robert Lucas. B) Michael Hutchinson and Carl Walsh. C) Finn Kydland and Edward Prescott. D) Robert Barro and Donald Gordon.
An individual who suffers from money illusion will
A) feel that a doubling of prices and income improves his economic position. B) concentrate on relative prices. C) never be fooled by the impact of price changes on the purchasing power of income. D) try to use counterfeit money.
Suppose a cost function is TC = Aq3 + bq2 + cq + d. Then the average variable cost is
a. Aq2 + bq + cq +d/q b. Aq2 + bq + c c. Aq3 + bq2 + cq d. d