Question 1

Economists view positive statements as

Accepted Answer

A) affirmative,justifying existing economic policy. 
B) optimistic,putting the best possible interpretation on things. 
C) descriptive,making a claim about how the world is. 
D) prescriptive,making a claim about how the world ought to be. 
A) affirmative,justifying existing economic policy. 
B) optimistic,putting the best possible interpretation on things. 
C) descriptive,making a claim about how the world is. 
D) prescriptive,making a claim about how the world ought to be.

Question 2

"Prices rise when the quantity of money rises rapidly" is an example of a

Accepted Answer

A) negative economic statement. 
B) positive economic statement. 
C) normative economic statement. 
D) statement that contradicts one of the basic principles of economics. 
A) negative economic statement. 
B) positive economic statement. 
C) normative economic statement. 
D) statement that contradicts one of the basic principles of economics.

Question 3

A positive economic statement such as "Pollution taxes decrease the quantity of pollution firms generate"

Accepted Answer

A) would likely be made by an economist acting as a policy adviser. 
B) would require values and data to be evaluated. 
C) would require data but not values to be evaluated. 
D) could not be evaluated by economists acting as scientists. 
A) would likely be made by an economist acting as a policy adviser. 
B) would require values and data to be evaluated. 
C) would require data but not values to be evaluated. 
D) could not be evaluated by economists acting as scientists.

Question 4

Economists speaking like scientists make

Accepted Answer

A) positive statements. 
B) prescriptive statements. 
C) claims about how the world should be. 
D) More than one of the above is correct. 
A) positive statements. 
B) prescriptive statements. 
C) claims about how the world should be. 
D) More than one of the above is correct.

Question 5

Which of the following is an example of a normative - as opposed to a positive - statement?

Accepted Answer

A) The discount rate is the interest rate the Federal Reserve charges banks to borrow funds. 
B) The US income tax rate increases with the amount of income earned. 
C) The government should increase the tax on gasoline. 
D) The US unemployment rate increased to 10 percent in 2009. 
A) The discount rate is the interest rate the Federal Reserve charges banks to borrow funds. 
B) The US income tax rate increases with the amount of income earned. 
C) The government should increase the tax on gasoline. 
D) The US unemployment rate increased to 10 percent in 2009.

Question 6

Analysis of data on workers and those looking for work is conducted by economists at the

Accepted Answer

A) Office of Management and Budget. 
B) Department of Labor. 
C) Congressional Budget Office. 
D) Department of the Treasury. 
A) Office of Management and Budget. 
B) Department of Labor. 
C) Congressional Budget Office. 
D) Department of the Treasury.

Question 7

When economists make positive statements,they are

Accepted Answer

A) speaking as scientists. 
B) speaking as policy advisers. 
C) making claims about how the world should be. 
D) revealing that they are very conservative in their views of how the world works. 
A) speaking as scientists. 
B) speaking as policy advisers. 
C) making claims about how the world should be. 
D) revealing that they are very conservative in their views of how the world works.

Question 8

The Federal Reserve

Accepted Answer

A) designs tax policy. 
B) enforces the nation's antitrust laws. 
C) sets the nation's monetary policy. 
D) analyzes data on workers. 
A) designs tax policy. 
B) enforces the nation's antitrust laws. 
C) sets the nation's monetary policy. 
D) analyzes data on workers.

Question 9

Which of the following statements is an example of a positive,as opposed to normative,statement?

Accepted Answer

A) Americans deserve a cleaner environment. 
B) Reducing emissions reduces days missed from school due to asthma. 
C) All Americans are entitled to quality health care. 
D) Economic policies should focus on improving equality. 
A) Americans deserve a cleaner environment. 
B) Reducing emissions reduces days missed from school due to asthma. 
C) All Americans are entitled to quality health care. 
D) Economic policies should focus on improving equality.

Question 10

One way to characterize the difference between positive statements and normative statements is as follows:

Accepted Answer

A) Positive statements tend to reflect optimism about the economy and its future,whereas normative statements tend to reflect pessimism about the economy and its future. 
B) Positive statements offer descriptions of the way things are,whereas normative statements offer opinions on how things ought to be. 
C) Positive statements involve advice on policy matters,whereas normative statements are supported by scientific theory and observation. 
D) Economists outside of government tend to make normative statements,whereas government-employed economists tend to make positive statements. 
A) Positive statements tend to reflect optimism about the economy and its future,whereas normative statements tend to reflect pessimism about the economy and its future. 
B) Positive statements offer descriptions of the way things are,whereas normative statements offer opinions on how things ought to be. 
C) Positive statements involve advice on policy matters,whereas normative statements are supported by scientific theory and observation. 
D) Economists outside of government tend to make normative statements,whereas government-employed economists tend to make positive statements.

Question 11

Duties of the Council of Economic Advisers include

Accepted Answer

A) advising the president and writing the annual Economic Report of the President. 
B) implementing the president's tax policies. 
C) tracking the behavior of the nation's money supply. 
D) All of the above are correct. 
A) advising the president and writing the annual Economic Report of the President. 
B) implementing the president's tax policies. 
C) tracking the behavior of the nation's money supply. 
D) All of the above are correct.

Question 12

Which of the following is an example of a normative,as opposed to positive,statement?

Accepted Answer

A) Universal health care would be good for U.S.citizens. 
B) An increase in the cigarette tax would cause a decrease in the number of smokers. 
C) A decrease in the minimum wage would decrease unemployment. 
D) A law requiring the federal government to balance its budget would increase economic growth. 
A) Universal health care would be good for U.S.citizens. 
B) An increase in the cigarette tax would cause a decrease in the number of smokers. 
C) A decrease in the minimum wage would decrease unemployment. 
D) A law requiring the federal government to balance its budget would increase economic growth.

Question 13

Which of the following is a positive,as opposed to a normative,statement?

Accepted Answer

A) The US Department of Justice should allow a merger between AT&T and T-Mobile because it would have little effect on consumers. 
B) Antitrust laws should be used to prevent further concentration in the wireless telephone service market. 
C) The US Department of Justice sued AT&T to block its merger with T-Mobile. 
D) The wireless telephone service market is too highly concentrated. 
A) The US Department of Justice should allow a merger between AT&T and T-Mobile because it would have little effect on consumers. 
B) Antitrust laws should be used to prevent further concentration in the wireless telephone service market. 
C) The US Department of Justice sued AT&T to block its merger with T-Mobile. 
D) The wireless telephone service market is too highly concentrated.

Question 14

The president of the United States receives tax policy advice from economists in the

Accepted Answer

A) Federal Reserve. 
B) Department of Justice. 
C) Department of the Treasury. 
D) Congressional Budget Office. 
A) Federal Reserve. 
B) Department of Justice. 
C) Department of the Treasury. 
D) Congressional Budget Office.

Question 15

The Council of Economic Advisers

Accepted Answer

A) was created in 1776 and consists of three members and a staff of several dozen economists. 
B) was created in 1776 and consists of thirty members and a staff of a dozen economists. 
C) was created in 1946 and consists of three members and a staff of several dozen economists. 
D) was created in 1946 and consists of thirty members and a staff of a dozen economists. 
A) was created in 1776 and consists of three members and a staff of several dozen economists. 
B) was created in 1776 and consists of thirty members and a staff of a dozen economists. 
C) was created in 1946 and consists of three members and a staff of several dozen economists. 
D) was created in 1946 and consists of thirty members and a staff of a dozen economists.

Question 16

In principle,we can

Accepted Answer

A) ignore positive statements when choosing among various public policy alternatives. 
B) ignore normative statements when choosing among various public policy alternatives. 
C) confirm or refute positive statements by examining evidence. 
D) confirm or refute normative statements by examining evidence. 
A) ignore positive statements when choosing among various public policy alternatives. 
B) ignore normative statements when choosing among various public policy alternatives. 
C) confirm or refute positive statements by examining evidence. 
D) confirm or refute normative statements by examining evidence.

Question 17

Economists at which of the following offices help formulate spending plans and regulatory policies?

Accepted Answer

A) Office of Management and Budget 
B) Department of the Treasury 
C) Congressional Budget Office 
D) The Federal Reserve 
A) Office of Management and Budget 
B) Department of the Treasury 
C) Congressional Budget Office 
D) The Federal Reserve

Question 18

Which of the following statements is correct about the roles of economists?

Accepted Answer

A) Economists are best viewed as policy advisers. 
B) Economists are best viewed as scientists. 
C) In trying to explain the world,economists are policy advisers;in trying to improve the world,they are scientists. 
D) In trying to explain the world,economists are scientists;in trying to improve the world,they are policy advisers. 
A) Economists are best viewed as policy advisers. 
B) Economists are best viewed as scientists. 
C) In trying to explain the world,economists are policy advisers;in trying to improve the world,they are scientists. 
D) In trying to explain the world,economists are scientists;in trying to improve the world,they are policy advisers.

Question 19

The Council of Economic Advisers

Accepted Answer

A) was created in 1946. 
B) advises the president of the United States on economic policy matters. 
C) writes the annual Economic Report of the President. 
D) All of the above are correct. 
A) was created in 1946. 
B) advises the president of the United States on economic policy matters. 
C) writes the annual Economic Report of the President. 
D) All of the above are correct.

Question 20

Normative statements are

Accepted Answer

A) prescriptive,whereas positive statements are descriptive. 
B) descriptive,whereas positive statements are prescriptive. 
C) backward-looking,whereas positive statements are forward-looking. 
D) forward-looking,whereas positive statements are backward-looking. 
A) prescriptive,whereas positive statements are descriptive. 
B) descriptive,whereas positive statements are prescriptive. 
C) backward-looking,whereas positive statements are forward-looking. 
D) forward-looking,whereas positive statements are backward-looking.

Exam 2: Thinking Like an Economist: The Economist As Policy Adviser

Economists view positive statements as

"Prices rise when the quantity of money rises rapidly" is an example of a

A positive economic statement such as "Pollution taxes decrease the quantity of pollution firms generate"

Economists speaking like scientists make

Which of the following is an example of a normative - as opposed to a positive - statement?

Analysis of data on workers and those looking for work is conducted by economists at the

When economists make positive statements,they are

The Federal Reserve

Which of the following statements is an example of a positive,as opposed to normative,statement?

One way to characterize the difference between positive statements and normative statements is as follows:

Duties of the Council of Economic Advisers include

Which of the following is an example of a normative,as opposed to positive,statement?

Which of the following is a positive,as opposed to a normative,statement?

The president of the United States receives tax policy advice from economists in the

The Council of Economic Advisers

In principle,we can

Economists at which of the following offices help formulate spending plans and regulatory policies?

Which of the following statements is correct about the roles of economists?

The Council of Economic Advisers

Normative statements are

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A