Normative economic statements
A. are statements that may be tested by referring to facts and data.
B. are statements of "what ought to be."
C. do not involve value judgments.
D. are statements of "what is."
Answer: B
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The Lucas Wedge shows
A) the negative impact inflation has on consumer spending. B) whether a country needs to slow its real GDP growth rate. C) the positive impact lower taxes have on real GDP. D) the negative impact a slowdown in real GDP growth has on potential GDP. E) the increased impact of government spending on real GDP.
In the diagram above, which figure(s) show(s) a direct relationship between the variables?
A) both A and C B) only D C) only A D) both B and C E) only B
A monopolistic competitor faces a horizontal demand curve.
Answer the following statement true (T) or false (F)
If the expenditure multiplier is 3.5 and investment spending increases by $2,000 billion, what will be the change in GDP?
a. $2,000 billion b. $5,000 billion c. $571.4 billion d. $3,500 billion e. $7,000 billion