Which of the following are positive economic statements and which are normative economic statements?
a. An increase in the minimum wage causes unemployment.
b. The government should raise the minimum wage above $7.25 per hour.
c. The prolonged recession has caused the unemployment rate to reach a 30-year high.
d. Interest rates need to be lower for the economy to emerge from the recession.
e. Inflation has decreased since the onset of the recession.
f. Once the recession has ended, interest rates should increase to assure that inflation does not go up.
Statements a, c, and e are positive economic statements. Statements b, d, and f are normative economic statements.
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Refer to the scenario above. If the income tax rate for the fourth household is higher than the income tax rate for the second household, it can be inferred that the government follows a ________ income tax system
A) progressive B) regressive C) proportional D) value-added
If the Fed buys a T-bill from a commercial bank, how will it pay for the T-bill?
a. It will give the bank new reserves. b. It will write the bank a check. c. It will transfer cash to the bank's vault. d. It will take reserves from another bank.
The components of the formula for the Taylor rule includes each of the following, except:
A. the current inflation rate. B. the inflation gap. C. the 30-year U.S. Treasury bond rate. D. the target federal funds rate.
If the money supply expands to much it lowers the value of the dollar?
Indicate whether the statement is true or false