Which of the following is true?
a. Positive economics deals with how people react to changes in benefits, and normative economics deals with how people react to changes in costs.
b. Positive economic statements are testable, but normative statements are not.
c. Positive economic statements involve value judgments while normative economics focuses on whether a policy will achieve its intended objectives.
d. Positive economic statements focus on policy issues while normative economics focuses on economic theory.
B
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The demonstration effect suggests that people will save less when they
A. control their spending in order to save more when the real interest rate increases. B. recognize that the real interest rate has increased. C. base their spending decisions (and consequently their saving decisions) on spending decisions of others who spend more than they do. D. base their saving decisions on their projections of income and spending needs over their lifetime.
Rank the following goods from most elastic to least elastic: The Economic Way of Thinking (11th ed.), economics textbooks, textbooks
A) The Economic Way of Thinking (11th ed.), economics textbooks, textbooks B) The Economic Way of Thinking (11th ed.), textbooks, economics textbooks C) Economics textbooks, The Economic Way of Thinking (11th ed.), textbooks D) Textbooks, economics textbooks, The Economic Way of Thinking (11th ed.) E) None of the above.
If self-correction causes prices to fall less than nominal wages, both output and real wages will decrease
a. True b. False Indicate whether the statement is true or false
If a bank has $500 in excess reserves and the reserve requirement is 20 percent, then the maximum amount by which this individual bank can increase the money supply is _____
a. $100 b. $400 c. $500 d. $1,000 e. $2,500