Positive economics answers the question, "What ought to be?" Normative 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)
False
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If velocity is equal to 4, this means that
A) the rate of growth of the money supply is 4. B) an increase in the money supply will lead to an increase in aggregate supply of 4. C) each dollar of the money supply is spent on the average 4 times per year. D) for every 4 dollars of the money supply, nominal GDP will increase by 4.
When the markets of an economy are more competitive, economic growth
What will be an ideal response?
People who apply for loans know more about their ability to repay the loan than the lenders do. This is an example of:
A. asymmetric information. B. public information. C. a negative externality. D. a community rating.
The foreign purchases effect suggests that a decrease in the U.S. price level relative to other countries will:
A. shift the aggregate demand curve leftward. B. shift the aggregate supply curve leftward. C. decrease U.S. exports and increase U.S. imports. D. increase U.S. exports and decrease U.S. imports.