If two economists disagree about the magnitude of employment effects of a proposed change in government policy, the difference in opinion
a. must be positive in nature
b. must be normative in nature
c. is more likely to be normative than positive
d. is more likely to be positive than normative
e. would be neither positive nor normative in nature
D
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If people expect the dollar to depreciate, then the
A) demand for dollars will decrease, the supply of dollars will increase, and the exchange rate will fall. B) demand for dollars will decrease, the supply of dollars will not change, and the exchange rate will fall. C) supply of dollars will increase, the demand for dollars will not change, and the exchange rate will fall. D) demand for dollars will increase, the supply of dollars will decrease, and the exchange rate will rise.
With capital on the vertical axis and labor on the horizontal axis, vertical isoquants imply that
A) capital and labor are perfect substitutes. B) capital and labor must be used together in a certain proportion. C) capital is not productive. D) labor is not productive.
Suppose market demand is p = 10 - Q. Firms have a fixed cost of five and no marginal cost. If firm A is the incumbent, can it deter the entry of its rival, firm B?
What will be an ideal response?
If the government wishes to correct the existence of positive externality, it could
A) grant subsidies to consumers to stimulate demand. B) impose a tax on the producers to stimulate supply. C) impose taxes on consumers to stimulate demand. D) grant subsidies to producers to reduce supply.