Classify the following as positive economics statements or normative economics statements
a) An increase in an individual's income increases consumption, but by an amount less than the increase in income.
b) The government should undertake the responsibility of providing healthcare to all its citizens.
c) A trade deficit can be advantageous to an economy.
d) An increase in net exports has a positive effect on a country's national income.
e) The gross domestic product of India is increasing at 5% annually.
The statements can be classified as follows:
a) An increase in an individual's income increases consumption, but by an amount less than the increase in income: Positive economic statement
b) The government should undertake the responsibility of providing healthcare to all its citizens: Normative economic statement
c) A trade deficit can be advantageous to an economy: Normative economic statement
d) An increase in net exports has a positive effect on a country's national income: Positive economic statement
e) The gross domestic product of India is increasing at 5% annually: Positive economic statement
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The value of the absolute price elasticity of demand for good X is 4. The absolute price elasticity for good Y is 1. Which good's quantity demanded is more responsive to a change in price?
A) Good X B) Good Y C) They are equally responsive. D) Not enough information is given.
In markets, information about the relative value of resources is communicated through: a. government agencies. b. planning committees. c. prices
d. unions.
Which of the following restricts the volume of international trade?
a. stable prices b. tariffs c. the law of comparative advantage d. stable international monetary system