Which of the following is an example of a positive statement?
A) It is too hot to go jogging.
B) Ceteris paribus, a teacher should award a higher grade if you study more hours for an economics test.
C) When the price of an item increases, people respond by reducing their consumption of the item.
D) The government should balance the budget.
Answer: C
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Consumption expenditure exceeds disposable income
A) when there is dissaving. B) when there is positive saving. C) always. D) never. E) only when the economy is in equilibrium.
According to the search model, the marginal benefit of acquiring information about a product is greater for expensive items than for cheap items
a. True b. False
Because the United States is highly integrated with the international capital market, international capital flows tend to
a. counteract the negative effect on aggregate demand of lower interest rates. b. counteract the positive effect on aggregate demand of higher interest rates. c. strengthen the negative effects on aggregate demand of higher interest rates. d. strengthen the negative effects on aggregate demand of lower interest rates.
Which of the following is true?
a. Poor countries are unable to ignite the growth process unless they receive financial aid from richer countries. b. Countries that fail to adopt institutions and policies supportive of trade, entrepreneurial discovery, and private investment will remain poor in the foreseeable future. c. Countries that lack an abundance of natural resources have been unable to grow and achieve high income levels. d. Countries with a large population relative to their land area are destined to remain poor.