"A positive economic statement is always true and a normative economic statement is always false." Do you agree or disagree with this statement? Explain
What will be an ideal response?
Disagree. A positive statement is one that is either descriptive or makes a prediction of the type "if A, then B." A descriptive statement can be false. For example, the statement, "It is raining today," may be either true or false. A prediction can also be false. A normative statement cannot appeal to evidence. The statement, "It shouldn't rain today," cannot be evaluated as either true or false by looking to see if is raining or not.
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Suppose the U.S. dollar price of the Japanese yen decreases. Given this information, which of the following is correct?
A) The dollar has appreciated. B) The dollar has depreciated. C) The yen has appreciated. D) The yen price of the dollar decreased.
What usually results when interest rates continue to increase?
A. Spending decreases. B. Production increases. C. Purchasing power increases. D. Unemployment decreases.