Normative economics deals with _________ and positive economics deals with _________
a. "what should be" topics or issues; "what is" topics or issues
b. abstractions of reality; reality
c. microeconomics; macroeconomics
d. negative economic outcomes; positive economic outcomes
e. changing economic conditions; unchanging economic conditions
A
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Which of the following are policy tools used by the Federal Reserve?
i. the federal personal income tax ii. open market operations iii. changing the required reserve ratio A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
If labor is the only variable input, an increase in the quantity of labor:
a. does not have any effect on the quantity of output. b. causes the output to increase initially at a diminishing rate and then at an increasing rate. c. causes the output to increase at a constant rate till the last worker is hired. d. causes the output to increase initially at an increasing rate and then at a decreasing rate. e. causes the output to decrease at a constant rate till the last worker is hired.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
If an increase in consumer incomes causes the demand curve for product Z to shift to the left, then it can be said that product Z is a(n):
a. Inexpensive good b. Normal good c. Luxury good d. Inferior good