Which of the following is an example of a positive economic statement?
a. The economy's output increased by 3 percent last year.
b. A central bank should not print more money because inflation will result.
c. Congress should stabilize the social security system by raising taxes now.
d. The economy should grow at 5 percent each year.
e. The government farm products surplus should be distributed to the needy.
A
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Suppose there are two economies, Alpha and Beta, that have the same production possibilities frontiers. If Beta devotes more resources to produce capital goods than consumer goods as compared to Alpha, then in the future
A. Beta will experience greater economic growth than Alpha. B. Alpha will not be able to achieve full employment or productive efficiency. C. Alpha will experience greater economic growth than Beta. D. Beta will not be able to achieve full employment or productive efficiency.
Suppose equilibrium for an economy occurs when C + I + G + X = $14 trillion. If the real Gross Domestic Product (GDP) is $13 trillion, then unplanned inventories are
A) increasing, and real Gross Domestic Product (GDP) will contract. B) increasing, and real Gross Domestic Product (GDP) will expand. C) decreasing, and real Gross Domestic Product (GDP) will expand. D) decreasing, and real Gross Domestic Product (GDP) will contract.
Prices serve the public interest by
A. making resource owners wealthy. B. rationing scarce resources. C. keeping poor people from purchasing more than they can afford. D. forcing the government to participate in the market.
The difference between accounting profit and economic profit relates to
a. the manner in which revenues are defined. b. how marginal revenue is calculated. c. the manner in which costs are defined. d. the price of the good in the market.