Normative economics
A) predicts the consequences of alternative actions.
B) answers the question "What ought to be?"
C) answers the question "What is?"
D) is the focus of most modern economic reasoning.
B
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For this question, assume that the Marshall-Lerner condition does not hold. A reduction in the real exchange rate will tend to cause which of the following to occur?
A) a reduction in NX and a reduction in foreign output (Y) B) a reduction in NX and an increase in domestic output (Y) C) an increase in NX and a reduction in Y D) an increase in NX and an increase in Y E) none of the above
The rate of inflation over time records the absolute change in the average cost of purchasing a basket of goods and services
a. True b. False Indicate whether the statement is true or false