Which of the following statement is normative?
A. A large budget surplus is likely to lower interest rates.
B. Higher taxes are needed to support education.
C. The interest rate increases are the result of Federal Reserve actions to decrease the money supply.
D. Trade deficits frequently occur in conjunction with budget deficits.
Answer: B
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A rise in the real interest rate will cause which of the components of aggregate demand to decline?
A) Only C B) Only C and I C) Only C, I, and NX D) C, I, G, and NX
Normative economics deals with ____ and positive economics deals with ____
a. what should be; what is b. fiction; fact c. microeconomics; macroeconomics d. negative aspects; positive aspects e. changing circumstances; same circumstances
For a given production possibilities frontier, which points are attainable?
a. points inside the frontier b. points outside the frontier c. points on or outside the frontier d. points on the frontier only e. points on or inside the frontier
When each person specializes in producing the good in which he or she has a comparative advantage, each person can gain from trade but total production in the economy is unchanged
a. True b. False Indicate whether the statement is true or false