Questions that address the cause-and-effect analysis of actions and their consequences are
A. positive questions.
B. normative questions.
C. not testable.
D. subjective.
A. positive questions.
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In recent economic history, the U.S. federal budget was in surplus from
A) 2001 through 2005. B) 1998 through 2001. C) 1990 through 1997. D) 1980 through 1989.
Long-run market supply curves are downward sloping if
A) firms are identical. B) the number of firms is restricted in the long run. C) input prices fall as the industry expands. D) All of the above.
A loan is said to be productive if it
a. increases the purchasing power of the borrower. b. increases the present utility of the borrower’s possessions. c. ultimately costs less to repay than it was worth when borrowed, due to inflation. d. increases the borrower’s total output and profits.
Greg's Tasty Ice Cream is considering building a new ice cream factory that costs $8.3 million. The company accountants believe that, not accounting for interest costs, building the factory will increase profits by $5 million the first year, $4 million the second year and have no value thereafter. Greg's Tasty Ice Cream should build the factory if the interest rate is
a. 3% but not if it is 4%. b. 4% but not if it is 5%. c. 5% but not if it is 6%. d. 6% but not if it is 7%.