One way to characterize the difference between positive statements and normative statements is as follows:
a. Positive statements tend to reflect optimism about the economy and its future, whereas normative statements tend to reflect pessimism about the economy and its future.
b. Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be.
c. Positive statements involve advice on policy matters, whereas normative statements are supported by scientific theory and observation.
d. Economists outside of government tend to make normative statements, whereas government-employed economists tend to make positive statements.
b
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A surplus tends to put ________ pressure on the price of the product, which ________ the quantity demanded
A) upward; increases B) upward; decreases C) downward; increases D) downward; decreases
A market structure in which a small number of firms compete is called
A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly.
A positive relationship exists between monetary growth and interest rates when the
A) aggregate supply curve is horizontal. B) aggregate demand curve is horizontal. C) price level is fixed. D) income effect offsets the liquidity effect.
Inefficient allocation of resources occurs when
a. no one can be made better off without having someone else give up something. b. it is possible to make some people better off without making others worse off. c. society is operating at a point high on the production possibilities frontier. d. society is operating at a point low on the production possibilities frontier.