All of the following are examples of normative statements EXCEPT:
A. Economic growth should not be allowed to exceed 5 percent per year.
B. Reducing inflation should not be done at the expense of more unemployment.
C. Unexpectedly high inflation redistributes wealth from lenders to borrowers.
D. The Federal Reserve should act decisively to reduce inflation.
Answer: C
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When demand increases and the demand curve shifts to the right, equilibrium price ________ and equilibrium quantity ________
A) increases; increases B) decreases; decreases C) decreases; increases D) increases; decreases
The above figure illustrates a single-price unregulated monopolist. If the monopolist maximizes its profit, the consumer surplus equals ________
A) $20,000 B) $10,000 C) $45,000 D) $40,000
The real exchange rate generally has ______ relationship with aggregate expenditure.
A. a negative B. a positive C. no D. a constant
An economic model can be described as
a. an abstract representation of reality b. a detailed description of some economic phenomenon c. something that is often more complex than the real-world phenomenon it represents d. a vehicle for making positive economic statements e. a vehicle for making normative economic statements