Which would be a normative economic statement?
a. Retail sales were flat last month and continue on their downward trend
b. Prices are increasing at a rate of 3 percent a year
c. This administration should raise taxes to pay for childcare programs
d. The poverty rate hit a new high last year
c. This administration should raise taxes to pay for childcare programs
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Seth is a competitive body builder. He says he has to have his 12-oz package of protein powder to "feed his muscles" every day. On the basis of this information, what can you conclude about his price elasticity of demand for protein powder?
A) It is perfectly inelastic. B) The price elasticity coefficient is 1. C) It is elastic. D) It is perfectly elastic.
According to the invisible hand theorem, as stated in the text,
A. even non-competitive markets are able to achieve Pareto efficient outcomes. B. an equilibrium produced by competitive markets will exhaust all gains from exchange. C. non-market forces can prevent the markets from guiding consumers to the contract curve. D. government interaction is sometimes needed as an invisible hand to lead the economy toward efficiency.
Table 29-1Effects of an open-market transaction on the balance sheets of banks and the fed (in millions of dollars) Banks ? Federal Reserve System ? Assets Liab. Assets Liab. Reserves +$10 ? U.S. Gov’t Bank Reserves U.S. Gov’t ? Sec. +$10 +$10 Securities?$10 ? ? ? ? In Table 29-1, the Federal Reserve System has
A. sold $10 million in government securities to banks, taking payment in cash. B. sold $10 million in government securities to banks, taking payment from the bank’s reserves. C. purchased $10 million in government securities from banks, paying for them with increases in banks’ reserves. D. purchased $10 million in government securities from banks, paying for them with new Federal Reserve notes.
The vertical slope of the long-run aggregate supply curve is based on the assumption that:
A. nominal wages and other resource costs do respond to price level changes. B. nominal wages are greater than real wages. C. nominal wages are less than real wages. D. nominal wages and other resource costs do not respond to price level changes.