The important characteristic of normative statements is that they
A) explain what really exists.
B) are based on somebody's values and cannot be tested.
C) explain what normally happens in the real world.
D) help guide us to what will normally occur if some economic variable changes its value.
E) do not use the ceteris paribus assumption.
B
You might also like to view...
Ignoring any supply-side effects, to close an inflationary gap of $100 billion with a government expenditure multiplier of 5, the government could
A) decrease government expenditure on goods and services by $20 billion. B) decrease government expenditure on goods and services by $100 billion. C) lower taxes by $100 billion. D) increase government expenditure on goods and services by $20 billion. E) lower taxes by more than $20 billion.
If inflation turns out to be higher than was anticipated, debtors are helped because
A) the real present value of their payments increases. B) the real present value of their payments decreases. C) the nominal present value of their payments increases. D) the nominal present value of their payments decreases.