Positive economics questions "What ought to be?" Normative economics predicts the consequences of alternative actions, answering the questions "What is?" or "What will be?"
Answer the following statement true (T) or false (F)
False
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What do economists mean when they say that capital can labor can be both complementary inputs and substitutes
What will be an ideal response?
The sale of foreign assets by a central bank accompanied by an open market purchase of securities of the same size results in:
A) a reduction in the monetary base B) an increase in the monetary base C) a sterilized intervention D) an unsterilized intervention
Efficient markets:
A. maximize total surplus. B. can occur without a central planner. C. occur when a perfectly competitive, well-functioning market is in equilibrium. D. All of these are true.
If a monopsony finds that its MRP is greater than its MLC, it
a. is doing the right thing to maximize profits b. should hire fewer workers to increase profits c. should hire more workers to increase profits d. should pay the workers a lower wage e. should produce less output