Which of the following is an example of a normative, as opposed to positive, statement?
a. If the price of a product decreases, people's willingness to buy that product will increase.
b. Reducing tax rates on the wealthy would benefit the nation.
c. If the national saving rate were to increase, so would the rate of economic growth.
d. The elimination of trade restrictions would increase an economy's standard of living.
b
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Starting from potential output, if consumer confidence increases and consumers decide to spend more, then this will generate a(n) ________ gap and inflation will ________.
A. recessionary; increase B. expansionary; decrease C. expansionary; increase D. recessionary; decrease
According to the Equal Pay Act of 1963, men and women who work for the same employer must receive the same pay in which of the following situations?
a. When they perform the same amount and type of work b. When they have been employed for the same length of time c. When they have the same level of experience and education d. When they perform similar tasks and have similar responsibilities
In the simplified circular flow diagram, leakage can occur when consumers save some income
a. True b. False Indicate whether the statement is true or false
There are 1,000 identical firms in a price-taker industry. In the short run, total revenues of each firm exceed total costs. What will happen in the long run?
a. Nothing, because each firm is already maximizing its profits. b. Many firms will enter the market and each firm will eventually operate at a loss. c. Additional firms will enter the market, and price will be driven down to where each firm will be making just enough to stay in business. d. Additional firms will enter the market, but the price will remain the same because the existing firms will not allow price to decrease.