Normative economics involves
A) a statement of fact.
B) a statement of "what should be."
C) a statement of "what is."
D) a statement that is purely descriptive.
Answer: B
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For many years after the Great Depression, economists believed a central bank policy of increasing bank reserves in response to a recession would be
A) largely ineffective. B) the opposite of what the circumstances required. C) useless unless it also raised interest rates. D) useless unless it was accompanied by declining prices.
The formal and informal institutions that support the economy including the laws, customs, manners, conventions, and other institutional under-pinnings that encourage people to pursue productive activity are called the rules of the game
Indicate whether the statement is true or false
If demand decreases and supply increases, which of the following is correct? Question 10 options:
A. The equilibrium price falls but the impact on the equilibrium quantity is ambiguous. B. The equilibrium price rises but the impact on the equilibrium quantity is ambiguous. C. The equilibrium quantity increases but the impact on the equilibrium price is ambiguous. D. The equilibrium quantity decreases but the impact on the equilibrium price is ambiguous. E. The equilibrium price falls and the equilibrium quantity decreases.
An income tax is progressive if
A. most of the tax revenue is used to benefit lower-income households. B. higher-income households pay a larger share of their income in taxes than lower-income households. C. most of the tax revenue is used to benefit higher-income households. D. lower-income households pay a larger share of their income in taxes than higher-income households.