Positive economics is concerned with justifying a particular distribution of income.
Answer the following statement true (T) or false (F)
False
Positive economics is interested in what is, not what should be. Fairness is a normative judgment.
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An increased demand for the services of tax accountants
A) may raise their fees but cannot affect their costs. B) may raise their fees by making it more costly for them to provide services to any client. C) will lead to fewer people using the services of tax accountants because higher prices mean a smaller quantity demanded. D) will lower their fees in the long run by producing more tax accountants.
Why is the credibility of the Fed's policy announcements particularly important?
What will be an ideal response?
If the central bank targets the money stock, then a negative shock to money demand will
a. shift the LM schedule to the right and income will rise above the target level. b. shift the LM schedule up and income will fall below the target level. c. not shift the LM schedule and, therefore, will not displace income from the target level. d. None of the above
Figure 9-2
Which of the following is true for the economy depicted in ?
a.
Potential output exceeds y1.
b.
When output y1 is achieved, the actual rate of unemployment will exceed the natural rate of unemployment.
c.
When output y1 is achieved, the actual rate of unemployment will be less than the natural rate of unemployment.
d.
When output y1 is achieved, the actual rate of unemployment will equal the economy's natural rate of unemployment.