All of the following are examples of normative statements EXCEPT:
A. Low unemployment is more desirable than low inflation.
B. High rates of economic growth are preferable to low rates.
C. Output per person should increase at an average annual rate of 5 percent.
D. Output per person typically grows more slowly than output per worker.
Answer: D
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When the AE line lies above the 45° line,
A) real GDP exceeds aggregate planned expenditure. B) there are unplanned increases in inventories. C) aggregate planned expenditure is less than real GDP. D) the price level is rising. E) there are unplanned decreases in inventories.
When a negative externality exists, _______________________ and thus _______________ intervention may be needed to achieve efficiency.
A. external costs are necessarily greater than private costs; government B. social costs equal private costs; no government C. social costs are less than private costs; government D. social costs are greater than private costs; government E. none of the above
Which of the following is not an autonomous determinant of consumption expenditures?
a. real wealth b. the interest rate c. tastes and preferences d. current disposable income
For a macroeconomist, the case for aggregation is based on two principles?1) the composition of demand and supply may not matter for some purposes, and 2)
a. during fluctuations markets normally move together. b. individual markets allocate resources efficiently. c. inflation, unemployment, and growth never go together. d. individual markets distribute income efficiently.