Which of the following sentences is a positive claim and which is a normative claim? We need a higher minimum wage. Working people at minimum wage are not above the poverty level. That is not fair. But a higher minimum wage will mean that some low wage workers will be laid off and have no job.
What will be an ideal response?
The first and third sentences are normative and the other two are positive statements.
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The demand for home computers has increased, yet the price has fallen. Explain this apparent paradox.
What will be an ideal response?
With the policy rate set at zero, the rise in expected inflation will lead to a ________ in the real interest rate, which will cause investment spending and aggregate output to ________
A) fall; rise B) fall; fall C) rise; rise D) rise; fall
An approach that can be taken by someone directly involved in a transaction to solve the problems caused by information asymmetry is:
A. statistical discrimination. B. mandating that information be shared. C. proofing. D. All of these are ways to solve information asymmetry.
Less of an economy's resources will be channeled into building new factories and equipment when: a. interest rates are high
b. households decide to save more of their income. c. firms are optimistic about their future profits. d. aggregate income increases. e. an economy has a trade deficit.