Which of the following are positive economic statements and which are normative economic statements?
a. An increase in the minimum wage causes unemployment.
b. The government should raise the minimum wage above $7.25 per hour.
c. The prolonged recession has caused the unemployment rate to reach a 30-year high.
d. Interest rates need to be lower for the economy to emerge from the recession.
e. Inflation has decreased since the onset of the recession.
f. Once the recession has ended, interest rates should increase to assure that inflation does not go up.
Statements a, c, and e are positive economic statements. Statements b, d, and f are normative economic statements.
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The market supply curve for labor is upsloping because:
A. of diminishing returns. B. employers as a group must pay higher wage rates to obtain more workers. C. of declining MRC. D. each employer is a "wage taker."
What are "mortgage-backed securities"?
A. Company stock shares for financial institutions that lend to home buyers. B. Bonds backed by mortgage payments. C. Treasury bills and savings bonds that banks sold to maintain liquidity during the mortgage default crisis. D. Insurance against mortgage loan defaults.