Which of the following is a normative economic statement?
A) Rising global demand for diesel and heating oil has led to increases in the price of crude oil.
B) With falling home prices and rising mortgage interest rates, the amount of foreclosures has increased.
C) The federal government is considering raising the gasoline tax to promote the use of public transportation.
D) Fashion designers should be allowed to copyright designs to promote innovation.
Answer: D
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Suppose that capital and labor must be kept in a fixed proportion to produce a particular good. For example, digging a trench requires one worker who has one shovel. What does this imply about returns to scale?
A) There are constant returns to scale. B) There are increasing returns to scale. C) There are decreasing returns to scale. D) Nothing.
Fixed exchange rates give countries too much freedom over their monetary policies, thereby threatening higher rates of inflation
a. True b. False Indicate whether the statement is true or false
What are the factors that can shift the supply of financial capital to a certain investment?
a. if people do not want to alter their existing levels of risk b. if the riskiness or return on one investment is the same as other investments c. if the riskiness or return on one investment changes relative to other investments d. if people do not want to alter their existing levels of consumption
If a nation produces less than it spends what do we know about: A. its net exports? B. its net capital outflow? C. its saving in relation to its domestic investment?