Which of the following is a normative economic statement?
A) Rising corn prices have increased the price of corn-based ethanol.
B) With rising home prices and falling mortgage interest rates, the amount of home foreclosures has decreased.
C) The federal government is considering increasing regulations on the use of fossil fuels to promote the use of wind power.
D) Farmers should not be allowed to grow and sell genetically-modified crops.
Answer: D
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Figure 14-6
In the situation shown in , how could the Fed return the economy to potential output?
a.
decrease government spending
b.
increase taxes
c.
decrease taxes
d.
shift to a more restrictive monetary policy
e.
shift to a more expansionary monetary policy
If the dollar appreciates in value relative to foreign currencies:
A. Aggregate demand decreases because C decreases B. Aggregate demand increases because C increases C. Aggregate demand decreases because net exports decrease D. Aggregate demand increases because net exports increase