The difference between positive economic statements and normative economic statements is that
a. both c and e are true
b. positive statements are based on opinion while normative statements are based on fact
c. positive statements are true and normative statements are often false
d. positive statements are often false and normative statements are true
e. positive statements are based on fact while normative statements are based on opinion
E
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If city officials expect that an increase in bus fares will raise mass transit revenues, they must think that the demand for bus travel is
a. elastic b. unit elastic c. inelastic d. perfectly inelastic e. -10
A single bank is severely limited in its ability to create money because: a. the FDIC will not permit it to create money unless the Resolution Trust Corporation guarantees the loans. b. loan recipients usually take the proceeds of the loan in cash
c. the funds loaned probably will be deposited in another bank. d. recent federal legislation prohibits banks from creating money except to finance international trade.
National income can be calculated by subtracting
A. depreciation from GDP. B. indirect business taxes from GDP. C. depreciation and indirect business taxes from GDP. D. transfer payments and taxes from GDP.
Table 5.2National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$2,850Exports$300Government purchases of goods and services$810Social Security taxes$295Net investment$510Indirect business taxes$445Imports$450Gross investment$700Corporate income taxes$190Personal income taxes$875Corporate retained earnings$210Net foreign factor income$0Government transfer payments to households$780Net interest payments to households$20On the basis of Table 5.2, GDP is
A. $4,400 billion. B. $4,210 billion. C. $4,020 billion. D. $2,090 billion.