Normative economics questions "What ought to be?" Positive economics predicts the consequences of alternative actions, answering the questions "What is?" or "What will be?"
Answer the following statement true (T) or false (F)
True
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A trade deficit means ________.
A. the capital account debit is larger than the credit B. the financial account debit is larger than the credit C. the current account debit is larger than the credit D. the reserve account debit is larger than the credit
A firm engaging in rent seeking activity
A) is breaking the law. B) is willing to spend up to the gain in producer surplus. C) is irrational. D) increases societal gain.
Which of the following is a determinant of Investment spending?
A. Expected future income B. Real income C. Wealth D. Taxes
A bank can only make a loan if it has
A) excess reserves. B) a creditworthy customer willing to pay a high interest rate. C) permission from the Federal Reserve. D) reserves equal to its deposits.