Harry Truman is credited with the statement, “Give me a one-armed economist,” because economists are likely to say, “On the one hand, . . . on the other hand.” Why do economists “waffle” more than physicists or chemists?
What will be an ideal response?
Economists describe human behavior, which cannot be predicted as accurately as physical or chemical reactions. Waffling can be found at the frontiers of all sciences, but the media pay more attention to economic debates, such as the effect of supply-side tax cuts on tax revenues, than to the debates of physicists (are quarks the smallest particle of matter?) or chemists. Value judgments also play a larger role in economic debates, since economics often deals with matters that directly affect the welfare of large numbers of people.
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The largest component of GDP is
A) gross private domestic investment. B) personal consumption expenditures. C) net exports of goods and services. D) government expenditure on goods and services.
Refer to Figure 11-4. The movement from E to B to D in the figure above illustrates
A) diminishing returns to capital. B) an improvement in technology. C) diminishing returns to labor. D) a decline in capital per worker.
Which of the following is an important assumption in the short-run macro model?
a. Government spending depends on income. b. Output does not change. c. Firms do not maintain inventories. d. Investment depends on income. e. Prices do not change.
A normative economic statement such as "The minimum wage should be abolished"
a. would likely be made by an economist acting as a scientist. b. would require values and data to be evaluated. c. would require data but not values to be evaluated. d. could not be evaluated by economists acting as policy advisers.