Which of the following statements or questions exemplify normative economics? (check all that apply)
a. The government ought to bail out distressed banks.
b. What will be the result of a Continental Airlines and United Airlines merger?
c. The government should increase the minimum wage.
d. What should the Federal minimum wage be?
e. When the price of gas rises, the quantity consumed falls.
a. The government ought to bail out distressed banks.
c. The government should increase the minimum wage.
d. What should the Federal minimum wage be?
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A low rate of expected inflation tends to lead to a ________ rate of actual inflation and a high rate of expected inflation tends to lead to a ________ rate of actual inflation.
A. low; high B. low; low C. high; low D. high; high
All economic models must involve simplifications because
a. economists would be unable to command high salaries if their models were so simple that anyone could understand them b. human behavior is very erratic and unpredictable c. reality is too complex to understand in its entirety, so we must reduce it to a level that we can understand d. they always try to duplicate all possible information and cover all possible variables that might influence decision making e. we must rely on value judgments and ignore reality
Taxes and government spending that affect fiscal policy without specific action from policymakers are called:
A. automatic stabilizers. B. discretionary fiscal policy. C. expansionary fiscal policy. D. contractionary fiscal policy.
Refer to the graph shown.
The richest 10 percent of the families earn:
A. 48 percent of the income. B. 52 percent of the income. C. 63 percent of the income. D. 37 percent of the income.