How do economists view positive statements?
a. affirmative, justifying existing economic policy
b. optimistic, putting the best possible interpretation on things
c. descriptive, making a claim about how the world is
d. prescriptive, making a claim about how the world ought to be
Ans: c. descriptive, making a claim about how the world is
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Describe the scope of economic profit in the long run for a perfectly competitive firm
What will be an ideal response?
An Australian investor buys a U.S. Treasury bond that has a price of $10,000 . pays 5 percent interest, and matures in a year. Between the purchase date and the maturity date, the exchange rate changes from $1 = AUD 5.0 to $1= AUD 5.2 . What will be the Australian investor's rate of return from the U.S. bond?
a. 4 percent b. 7 percent c. 9.2 percent d. 12 percent e. 25 percent