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Chapter 2 Thinking Like an Economist




Question;27. A normative economic statement such as ?The minimum wage should be;abolished?;a.;would;likely be made by an economist acting as a scientist.;b.;would;require values and data in order to be evaluated.;c.;would;require data but not values in order to be evaluated.;d.;could;not be evaluated by economists acting as policy advisers.;28. In principle, we can;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.;29. Which of the following is not correct?;a.;Evaluating;statements about how the world should be involves values as well as facts.;b.;Positive;statements can, in principle, be confirmed or refuted by examining evidence.;c.;Normative;statements can be judged using data alone.;d.;Deciding;what is good or bad policy is not just a matter of science.;30. When an economist evaluates a positive statement, he or she is;primarily;a.;examining;evidence.;b.;evaluating;values as well as facts.;c.;acting;as a policy adviser.;d.;concerned;with making a sound decision on how the world ought to be.;31. Normative conclusions;a.;come;from positive analysis alone.;b.;are;based on ignorance of positive analysis.;c.;involve;value judgments.;d.;reflect;the economist?s role as scientist.;32. Which of the following is an example of a positive, as opposed to;normative, statement?;a.;Inflation;is more harmful to the economy than unemployment is.;b.;If;welfare payments increase, the world will be a better place.;c.;Prices;rise when the government prints too much money.;d.;When;public policies are evaluated, the benefits to the economy of improved;equality should be considered more important than the costs of reduced;efficiency.;33. Which of the following is an example of a positive, as opposed to;normative, statement?;a.;Income;tax rates should not have been cut as they were a few years ago.;b.;The;quantity of money has grown too slowly in recent years.;c.;When the;quantity of money grows rapidly, inflation is a predictable consequence.;d.;All of;the above are positive statements.;34. Which of the following statements is an example of a positive, as;opposed to normative, statement?;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.;35. ?Allowing;all individuals access to Medicare and Medicaid for health insurance is the;fair thing to do? is an example of a;a.;contradiction;in economic theory.;b.;positive;economic statement.;c.;negative;economic statement.;d.;normative;economic statement.;36. ?Prices;rise when the quantity of money rises rapidly? is an example of a;a.;negative;economic statement.;b.;positive;economic statement.;c.;normative;economic statement.;d.;statement;that contradicts one of the basic principles of economics.


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