Positive economic analysis _____
a. evaluates policy changes and determines whether it is a good idea
b. seeks to understand the outcome of a policy change
c. cannot be proven incorrect
d. is a statement about "what ought to be"
b
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In the foreign exchange market, U.S. residents wishing to purchase foreign exports or foreign real and financial assets must:
A) demand U.S. dollars by supplying foreign currency. B) demand U.S. dollars by supplying U.S. dollars. C) supply U.S. dollars by demanding foreign currency. D) none of the above.
Governments sometimes subsidize domestic industries. When this occurs
A) the governments will not impose tariffs. B) the subsidized sell less in international markets because it is more profitable to sell at home. C) the subsidized industries have an advantage on international markets relative to non-subsidized firms. For this reason, other countries often impose tariffs on the subsidized imports. D) the subsidized industries have an advantage on international markets relative to nonsubsidized firms. However, this is not an argument for imposing tariffs and tariffs would violate international agreements.
When the Fed is pursuing expansionary monetary policy it will tend to reduce the demand for the dollar and increase net exports, other things equal
a. True b. False Indicate whether the statement is true or false
The following simple model is used to determine the annual savings of an individual on the basis of his annual income and education.
Savings = ?0 + 
0 Edu + ?1Inc + u
The variable ‘Edu' takes a value of 1 if the person is educated and the variable ‘Inc' measures the income of the individual.
?
?
Refer to the above model. If 
0> 0, _____.
A. uneducated people have higher savings than those who are educated
B. educated people have higher savings than those who are not educated
C. individuals with lower income have higher savings
D. individual with lower income have higher savings