Identifying the effect of an increase in the money supply on prices requires the use of:
A. subjective economics.
B. the art of economics.
C. positive economics.
D. normative economics.
Answer: C
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The one uncontroversial statement at the foundation of "supply-side" theory is that
A) cutting income tax rates raises the tax base by enough to increase tax revenues. B) income taxes reduce the after-tax reward to work and saving. C) reducing income taxes would significantly increase work effort. D) reducing income taxes would significantly increase personal saving.
Financial futures contracts are regulated by
A) the Commodity Futures Trading Commission. B) the Federal Trade Commission. C) the Interstate Commerce Commission. D) the Options and Futures Commission.
Which of the following observations concerning the Keynesian model is not true? a. It is helpful in explaining the events that unfolded in the 1930s
b. It is less useful in explaining today's economy. c. It explains the stagflation of the 1970s. d. It does not incorporate possible shifts in the aggregate supply curve.
A sub-prime loan is a loan extended to borrowers
a. at a subsidized interest rate below the prime rate normally offered to the most creditworthy borrowers. b. with blemished credit or limited documentation of their income, employment history, and other indicators of credit worthiness. c. seeking a 30-year, fixed rate mortgage. d. who have a FICO score above 660.