PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 4, Problem 4.3CC
To determine
Describe the difference between positive and negative statements.
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Based off of these choices, which of the following are facts about the U.S. economy? Select all that apply.
A. Chinese imports account for less than 20% of all imports into the United States.
B. The standard of living in the United States (as measured by real GDP per person) is higher now than it was 50 years ago.
C. Most of the goods Americans buy are made in China.
D. Federal government jobs have grown rapidly over the past few decades.
Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes should be increased on beer because college students drink too much." We can conclude that:
Ben's statement is normative, but Holly's is positive.
Holly's statement is normative, but Ben's is positive.
Both statements are normative.
Both statements are positive.
What is economics all about? What is supply and demand? What is exchanges rates?
Chapter 4 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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- Can you confirm that I am correct with these positive and normative statements: Positive statement: When oil production slows in Texas, employment and tax revenues decline, and budget cuts at the state and local levels often follow. (Craymer has estimated that the state loses $85 million per year for every $1 decrease in oil prices.) Normative statement:If Russia agrees to production cuts and COVID-19 goes dormant in the hot summer months, as some experts expect, Texas’ coffers will have time to recover before lawmakers convene in 2021 to write a new budget. Or would this be a normative statement:Experts said Texas is better positioned to handle an oil price collapse today thanks to a diversified economy. The last collapse in oil prices, in 2014, also forced the industry to cut costs and otherwise become more efficient. But University of Texas at Austin energy resources professor Michael Webber said COVID-19 throws an unprecedented economic variable into the mix.arrow_forwardQuestion 12 of 23 Classify each of the statements as an example of positive or normative analysis.. The sugar quota in the United States costs consumers $6.08 billion a year. Positive Higher tariffs on imported automobiles would decrease the demand for Normative foreign made cars. International trade should be be limited because it can cause some workers Positive to lose their jobs. International trade makes some people better off and some people Normative worse off. The U.S. should impose import quotas in the market for consumer Normative electronics to help domestic workers. The sugar quota in the U.S. is good public policy and should be Positive made stronger. Answer Bank Normative Positive MacBook Airarrow_forwardSenator Ernest Hollings once wrote that "consumers do not benefit from lower-priced imports. Glance through some mail-order catalogs and you'll see that consumers pay exactly the same price for clothing whether it is U.S.-made or imported."Is the statement that the Senator made a true statement or a false statement? True Falsearrow_forward
- Brinley says that "gas prices are rising because there aren't enough oil refineries." argues that "gas prices are rising because of the growing demand for gasoline fro and India." We can conclude that: Brinley's statement is positive; Katie's statement is normative. Both statements are positive. Brinley's statement is normative; Katie's statement is positive. Both statements are normative. Question 4arrow_forwardClassify each of the following statements as positive or normative. Explain.a. Society faces a short-run trade-off between inflation and unemployment.b. A reduction in the rate of money growth will reduce the rate of inflation.c. The Federal Reserve should reduce the rate of money growth.d. Society ought to require welfare recipients to look for jobs.e. Lower tax rates encourage more work and more savingarrow_forwardii. Identify each of the following topics as being part of microeconomics or macroeconomics: a.the impact of a change in consumer income on the purchase of luxury automobiles b.the effect of a change in the price of Coke on the purchase of Pepsi c.the impact of a war in the Middle East on the rate of inflation in the United States d.factors influencing the rate of economic growth. e.factors influencing the demand for tractors. f.the impact of tax policy on national saving.arrow_forward
- Each of the following situations requires some trade-offs. You are supposed to analyze and discuss a few trade-offs with respect to each of the given situation. a. A Parliamentarian has to make a decision whether to spend on welfare of poor people during a COVID-19 pandemic. b. President of Elko Pharma Karachi wants to make a decision whether to start a new factory. c. Federal government of Pakistan wants to decide how much to spend on national defense during 2020-2010. d. A student in Karachi who's recently finished his BS in Computer Science wants to decide whether to start his MS in Computer Science. e. A lower income family wants to decide whether to buy a new car.arrow_forwardA television program examining the issue of Mexican immigration stated that most economists believe immigration is a benefit to the United States. a. State the chain of reasoning underlying this view. b. From a normative perspective, is the key issue wage effects on native workers or subsidies of immigrants by the host country? Why?arrow_forward
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