What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement
What will be an ideal response?
Positive economic analysis is concerned with what is. Positive economic analysis reaches conclusions based on verifiable statements. Normative economic analysis, on the other hand, is concerned with what ought to be. Normative analysis reaches conclusions based on opinions. (Students will give many different examples.)
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The most commonly used tool in monetary policy is
A) changes in the discount rate. B) express lending transactions. C) open market operations. D) changes in required reserve ratios.
If the inverse demand function for a monopoly's product is p = 100 - 2Q, then the firm's marginal revenue function is
A) -2. B) 100 - 4Q. C) 200 - 4Q. D) 200 - 2Q.
Which of the following is included in gross private domestic investment?I.The purchase of new capital goodsII.An increase in business inventories
A. I only B. II only C. Both I and II D. Neither I nor II
Expenses that a firm does NOT have to pay out of pocket are
A) wages of employees. B) taxes. C) implicit costs. D) explicit costs.