Refer to the diagram. If actual production and consumption occur at Q 2 :
A. efficiency is achieved.
B. an efficiency loss (or deadweight loss) of a + b + c + d occurs.
C. an efficiency loss (or deadweight loss) of a + c occurs.
D. an efficiency loss (or deadweight loss) of e + f occurs.
A. efficiency is achieved.
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Determine whether each of the following is a positive or normative statement. (a) The Fed should lower interest rates to increase economic growth, because we're in a recession. (b) Higher government budget deficits cause higher interest rates
(c) The trade deficit should decline because of the fall in the value of the dollar. (d) Because of our high inflation rate, we must reduce the rate of money growth. (e) A generous unemployment insurance system is a primary cause of high unemployment in Europe. (f) Increased average labor productivity in a country should lead to faster growth. (g) Government budget deficits are too high in the United States and should be reduced.
A statement describing how the world should be
a. is a normative statement. b. is a positive statement. c. would only be made by an economist speaking as a scientist. d. would only be made by an economist employed by the government.