Which of the following is an example of a normative statement?
a. If the money supply falls, interest rates will rise.
b. Teenage unemployment would be lower if there were no minimum wage.
c. The quantity of shirts sold increases as the price of shirts decreases.
d. The federal government's total spending should be reduced.
e. If interest rates go up, then construction activity will fall.
D
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The classical economists believed that
a. labor supply is upward sloping because the income effect is greater than the substitution effect. b. labor supply is upward sloping because the substitution effect is greater than the income effect. c. labor supply is downward sloping because the income effect is greater than the substitution effect. d. in equilibrium, the marginal product of labor must exceed the real wage. e. both b and d.
Aggregate demand is the sum of total domestic spending by the private sector.
Answer the following statement true (T) or false (F)
Infrastructure projects result in the most value from a fiscal stimulus but a problem is that
a. there are technological issues that need to be solved. b. they are too complex to implement. c. most such projects are "prestige" projects, with little tangible value. d. most such projects do not increase productivity long into the future. e. most such projects are not "shovel ready" when the stimulus is needed.
M2 includes:
a. Currency in circulation + Reserves of financial intermediaries (e.g., banks) + Checking Accounts + Near Money. b. Currency in circulation + Checking Accounts c. Currency in circulation + Cash inside financial intermediaries + Deposits at the central bank + Checking Accounts + Near Money. d. Currency in circulation + Checking Accounts + Near Money. e. Monetary base plus currency in circulation.