Which of the following is a normative statement?
A. A decrease in price leads to an increase in quantity consumed.
B. Incomes grow more rapidly in high-tax states than low-tax states.
C. People would be better off if government expenditures were higher.
D. People will buy less butter at $1.50 per pound than they will at $1 per pound.
Answer: C
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According to the Monetarists, the money supply is a major factor determining
A) aggregate supply. B) aggregate demand. C) velocity. D) real wages.
The classically-based models (classical, new classical, monetarist, real business cycle) all agree that
a. markets always clear. b. monetary policy can affect output in the short-run but not the long-run. c. changes in aggregate drive most changes in output. d. stabilization policy is ineffective. e. None of the above
A decrease in demand for a good could mean that
a. consumers are willing to pay a higher price for each quantity of the good b. consumers are willing to buy larger quantities of the good at each price c. the demand curve has undergone a parallel shift to the right d. the demand curve has undergone a nonparallel shift to the right e. the demand curve has shifted to the left
Before the Great Depression of the 1930s, the majority of government spending took place at the ________ and after the Great Depression the majority of government spending took place at the ________
A) state and local levels; federal level B) local level; federal level C) federal level; state and local levels D) federal level; state level