Read "Teen Pregnancy Prevention: Welfare Reform's Missing Component," by Isabel Sawhill of the Brookings Institution
Is this an example of positive economics, normative economics, or a combination of both positive and normative economics?
Briefly state the positive and/or normative economic arguments that are embedded in this article.
The article involves a mix of positive and normative economics.
Some of the major positive and normative arguments appear below:
Positive economics:
- an increase in output reduces welfare expenditures and caseloads (the reverse occurs during a downturn),
- welfare reform has reduced,
- teenage pregnancy and out-of-wedlock pregnancy are major factors in explaining long-run changes in child poverty and welfare caseloads,
- early childbearing reduces the incentive for individuals to acquire additional education,
- low-income and young parents spend less on education and health care for their children
- the availability of low-cost contraception and abortion resulted in an increase in teenage sexual activity during the 1970s and 1980s,
- AIDS, welfare reform, economic growth, and more stringent enforcement of child support laws have lead to declines in teenage sexual activity during the 1990s, and
- the "marriage penalty" in the tax system reduces the incentive for low-income individuals to marry.
Normative economics:
- society should create an incentive system that discourages welfare dependency,
- it is undesirable to provide children with unequal access to health care and education (this is implicit in the discussion), and
- states should devote more funding to programs designed to reduce teenage pregnancy and discourage out-of-wedlock pregnancy.
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Which of the following types of financial institutions is required to belong to the Federal Reserve System?
a. National banks. b. State-chartered banks. c. Savings and loan institutions. d. Credit unions.
Which of the following is not an aspect of Keynesian economics?
A) Wages and prices tend to be inflexible downward. B) Supply does not necessarily generate its own demand. C) The interest rate is important in determining the level of investment, but not as important as other variables. D) Unemployment above natural unemployment is always a brief and temporary phenomenon.
You study horse racing avidly and discover for this year's Kentucky Derby you think you have the field pretty well figured out. In fact, you calculate the expected return and it is the same as the expected return you are getting from the stock market. Is this investment in the race valuable to you?
What will be an ideal response?
Changes in the stocks of finished goods and goods in process as well as changes in the raw materials that businesses keep on hand is known as
A. fixed investment. B. inventory investment. C. the income approach. D. the expenditure approach.