Question 1.6 Positive versus Normative Economi

04 Jun Question 1.6 Positive versus Normative Economi

Question
1.6 Positive versus Normative Economics

1) Normative economic statements

A) violate the law of ceteris paribus.

B) contain value judgments.

C) are usually irrational.

D) are easily testable.

2) Normative economics involves

A) a statement of fact.

B) a statement of “what should be.”

C) a statement of “what is.”

D) a statement that is purely descriptive.

3) “If A occurs then B will follow” is a

A) positive statement.

B) normative statement.

C) non-testable statement.

D) statement lacking in logic.

4) “If the United States enters a war in the Middle East, the economy will go into a recession” is an example of

A) a positive statement.

B) an easy to prove statement.

C) a normative statement.

D) a factual statement.

5) Which of the following is an example of a positive economic statement?

A) In order to reduce the budget deficit, tax rates should be increased.

B) In order to increase employment, the minimum wage should be decreased.

C) If payroll taxes are raised, then the Social Security crisis will be resolved.

D) If gas prices fall, consumers should purchase more gas.

6) “No individual should have less than $20,000 income in the United States in 2010” is an example of

A) a normative statement.

B) a positive statement.

C) an illogical and refutable statement.

D) a truism.

7) Which of the following is a normative statement?

A) An increase in consumer income will lead to increased sales of beef.

B) A decrease in the rate of unemployment will lead to upward pressure on consumer prices.

C) An increase in the income tax will cause a greater reduction in savings than an increase in the sales tax.

D) An economy with high unemployment can be worse off than an economy with high inflation.

8) Which of the following is a positive economic statement?

A) No individual should live in poverty.

B) The rate of unemployment of young African-Americans exceeds that of white Americans.

C) Unemployment is a more serious problem than inflation.

D) Economic considerations are less relevant than ethical issues in deciding national policy.

9) “All Americans should have access to health care” is an example of

A) a positive statement.

B) a microeconomic argument.

C) a factual statement.

D) a normative statement.

10) When a U.S. Senator tells a campaign crowd that “High inflation rates are a much more serious economic problem than high unemployment rates,” it is an example of

A) a normative statement.

B) an empirically proven fact.

C) a positive statement.

D) a microeconomic argument.

11) Which of the following statements is a positive economic statement?

A) The number of families living in poverty in the United States is too high.

B) One in every five children in the United States is living in poverty.

C) Government programs to help the poor are just making problems worse.

D) Increases in poverty rates signify a deterioration of the U.S. economy.

12) Which of the following statements is a positive economic statement?

A) The Congress should pass the president’s tax package.

B) Tax rebates always give too much favor to rich people.

C) The President’s budget included an increase in unemployment insurance payments.

D) none of the above

13) Which of the following statements is a normative as opposed to a positive economic statement?

A) Consumer spending generates more jobs.

B) If the price of gasoline goes up, people buy less.

C) Labor unions should be allowed to organize in every industry.

D) Government intervention in markets is common in many countries.

14) Whenever statements embodying values are made, we enter the realm of

A) positive economics.

B) normative economics.

C) microeconomics.

D) macroeconomics.

15) Positive economic analysis is said to be

A) true.