Which of the following statements best serves as a summary of the other statements?
a. Low income can mean poor nutrition during the formative years, which can retard mental and physical development
b. Low income and low productivity may reinforce each other in a cycle of poverty
c. Low productivity obviously results in low income
d. Low income means less saving and less saving means less investment in human and physical capital
e. Poverty can result in less education, less capital formation, a poor diet, and little health care
B
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A normative economic statement is
a. a statement of fact b. a statement of opinion which advocates a particular position c. not acceptable in the economics profession d. the only acceptable manner to present economic information e. a statement based upon government-supplied information
Where it wants to produce, the firm in Figure 8.14 would be:
A. making a zero economic profit. B. losing money. C. making a positive economic profit. D. breaking even.
A luxury good is one whose demand ______ as income increases.
A. decreases B. does not change C. rises sharply D. rises slightly
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline