The important characteristic of normative statements is that they
A) explain what really exists.
B) are based on somebody's values and cannot be tested.
C) explain what normally happens in the real world.
D) help guide us to what will normally occur if some economic variable changes its value.
E) do not use the ceteris paribus assumption.
B
You might also like to view...
The long-run effect of a decrease in the growth rate of the quantity of money is a
A) higher real interest rate. B) lower nominal interest rate. C) higher inflation rate. D) higher nominal interest rate. E) lower real interest rate.
If the marginal propensity to consume (MPC) is 0.50, the value of the spending multiplier is:
a. 5. b. 1. c. 2. d. 5.
The slope of a typical production possibilities frontier reflects the fact that
A. some systems of market organization are more efficient than others. B. the invisible hand always functions smoothly in a market system without government intervention. C. when resources are allocated efficiently, it’s impossible to produce more of anything without producing less of something else. D. production is only possible when resources are allocated efficiently.
Increased productivity in the agricultural sector during much of the twentieth century shifted the
A) demand curve for farm products rightward. B) supply curve of farm products leftward. C) demand curve for farm products leftward. D) supply curve of farm products rightward.