Which of the following is an example of a positive, as opposed to normative, statement?
a. When the minimum wage is increased, unemployment is a predictable consequence.
b. The income tax rate should be increased to offset the budget deficit.
c. Increasing government spending is the best way to help the economy move out of a recession.
d. More than one of the above are positive statements.
a
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If the problem of asymmetric information is so serious that a lender chooses not to lend to any potential small business borrower, then the problem is
A) moral hazard. B) adverse selection. C) market failure. D) disintermediation.
Why are graphs such an important tool in economics?
A purely competitive firm will be willing to produce at a loss in the short run provided:
A. price exceeds marginal costs. B. the loss is no greater than its marginal costs. C. the loss is no greater than its total variable costs. D. the loss is no greater than its total fixed costs.
Which of the following companies would gain from foreign currency depreciation?
A. Companies that borrow in foreign currency. B. Companies that export goods and services. C. Companies that invest in the foreign equity markets. D. Companies that buy bonds issued by the foreign government.