Which of the following is an example of a normative statement?
a. If the price of CDs drops significantly, BlankCD, Inc. will declare bankruptcy.
b. If the price of CDs drops significantly, the demand for CDs will increase.
c. If the price of CDs drops significantly, the CEO should sell BlankCD, Inc.
d. If the price of CDs drops significantly, the supply of CDs will also drop.
c. If the price of CDs drops significantly, the CEO should sell BlankCD, Inc.
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Suppose most consumers who eat hotdogs also use mustard, a complementary good. If the price of hotdogs rises, which is most likely to happen?
A) The demand curve for mustard will shift right. B) The demand curve for hotdogs will shift right. C) The demand curve for mustard will shift left. D) The demand for hotdogs will fall.
If the U.S. government imposed quotas on imports of clothing, then U.S
a. imports and exports would both fall. b. imports would fall and exports would rise. c. imports would rise and exports would fall. d. None of the above is correct.
The statement, "John buys more of good X as his income increases, Ceteris paribus," means:
A. John's income is being held constant. B. John's purchases of good X are being held constant. C. John's income and purchases of this good are being held constant. D. the price of good X is being held constant.