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Commerce and BusinessbackBusinessbackPrinciples of EconomicsbackEconomicsbackPractice Set 2495back

Economic Theories,data,and Graphs

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Question 1
Free
Multiple Choice

Disagreements over positive statements

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A

cannot arise because positive statements are facts.

B

are best handled by an appeal to the facts.

C

arise from the failure to distinguish between a positive and a normative statement.

D

are basically devoid of any emotion.

E

never occur.

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Question 2
Free
Multiple Choice

A positive statement is one that states

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A

what is,was,or will be.

B

what is and what should be.

C

what should be but is not.

D

what is desirable.

E

non-negative numbers.

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Question 3
Free
Multiple Choice

Which is the best description of positive statements? Positive statements

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A

have been verified by appeal to factual evidence.

B

form the basis of all normative arguments.

C

are falsifiable in principle by appeal to factual evidence.

D

are seldom employed in social sciences like economics.

E

have no place in economics because economics deals only with value judgments.

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Question 4
Free
Multiple Choice

Which is an example of a positive statement?

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A

There should be one price for gasoline throughout Canada.

B

The higher the price for gasoline,the less of it will be consumed.

C

Substitutes for fossil fuels should be developed.

D

Canada should reduce its imports of consumer goods.

E

Corporations in Canada should pay more taxes.

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Question 5
Free
Multiple Choice

Which is the best description of a normative statement? A normative statement

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A

can be derived logically from facts.

B

concerns what is provable.

C

is a statement that is empirically testable.

D

is one that involves a value judgment.

E

has no place in the study and practice of economics.

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Question 6
Multiple Choice

Which of the following is a normative statement?

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A
The sun rises in the west and sets in the east.
B
A government deficit will reduce unemployment and cause an increase in prices.
C
Reducing unemployment is more important than reducing inflation.
D
Queen Elizabeth II is the wealthiest woman in the world.
E
An increase in the price of lumber is followed by a decrease in the construction of new houses.
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Question 7
Multiple Choice

Which of the following is a normative statement?

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A
The higher is the level of taxes,the lower is consumption spending.
B
The higher is the level of taxes,the higher are wage demands.
C
A reduction in export taxes on petroleum would result in higher wages.
D
Tuition fees should be waived for low-income students.
E
A free-trade agreement between two countries will result in an increase in trade.
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Question 8
Multiple Choice

Suppose an economist tells you that the unemployment rate in Canada last year was 7.8%.This is an example of a(n) ________ statement.

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A
autonomous
B
positive
C
normative
D
induced
E
imputed
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Question 9
Multiple Choice

Suppose an economist tells you that,on average,people in Canada have too much personal debt.This is an example of a(n) ________ statement.

Choose correct answer/s
A
autonomous
B
positive
C
normative
D
independent
E
induced
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Question 10
Multiple Choice

Which of the following statements belongs more properly in the field of normative economics than positive economics?

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A
An increase in the minimum wage leads to more unemployment.
B
The price of one Canadian dollar is $0.85 U.S.
C
When a drought occurs,the price of vegetables tends to rise.
D
Canadian governments should provide assistance to the auto industry.
E
Technological change has reduced the cost of cell phone service.
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Question 11
Multiple Choice

Which of the following best describes the relationship between positive and normative statements in economics?

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A
Normative statements are those with which all economists agree; positive statements may give rise to some disagreement.
B
Positive and normative statements are alternate ways of describing the desirability of certain economic policies.
C
Normative statements evaluate the desirability of certain economic changes; positive statements do not.
D
Neither positive nor normative statements are concerned with the desirability of certain economic changes.
E
Economists generally agree with each other regardless of whether a question is positive or normative.
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Question 12
Multiple Choice

A theory

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A
enables one to predict the future with certainty.
B
is designed to explain and predict what we observe.
C
is used to impose order on the world.
D
can only be tested with a controlled experiment.
E
assumes definitions for variables.
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Question 13
Multiple Choice

An assertion about the desirability of reducing unemployment by lowering payroll taxes is most likely

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A
a theory.
B
a testable proposition.
C
a hypothesis.
D
a normative statement.
E
a positive statement.
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Question 14
Multiple Choice

An economic theory requires,among other things,

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A
a set of definitions of the variables to be considered.
B
a controlled laboratory setting in which the theory can be tested.
C
that the set of predictions be correct.
D
a set of value judgments to interpret the empirical evidence.
E
the use of endogenous variables only.
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Question 15
Multiple Choice

Choose the statement that best describes how endogenous variables differ from exogenous variables.

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A
An endogenous variable is explained within the theory,while an exogenous variable influences the endogenous variables but is determined outside the theory.
B
An endogenous variable is a flow,while an exogenous variable is a stock.
C
An endogenous variable is explained outside the theory and influences an exogenous variable while an exogenous variable is explained within the theory.
D
An exogenous variable is a function of the endogenous variable,and both are flow variables.
E
An endogenous variable is a function of the exogenous variable,and both are stock variables.
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Question 16
Multiple Choice

Suppose there is a theory that several things influence the price of fish in Halifax,one of which is the weather during the fishing season.When examining the determinants of the price of fish,the weather is

Choose correct answer/s
A
an endogenous variable,as it influences the price of fish.
B
an exogenous variable,as it is determined outside the theory.
C
a stock,as it influences the quantity of fish caught.
D
an act of God and,therefore,has no legitimate connection with the theory.
E
an endogenous variable,as it is determined within the theory.
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Question 17
Multiple Choice

The statement that a country's rate of economic growth is influenced by its firms' investment behaviour is an example of a(n)

Choose correct answer/s
A
variable.
B
prediction.
C
normative statement.
D
theory.
E
economic law.
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Question 18
Multiple Choice

The statement that a 2% increase in the money supply leads to a 2% increase in the price level is an example of a(n)

Choose correct answer/s
A
prediction.
B
assumption.
C
normative statement.
D
variable.
E
model.
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Question 19
Multiple Choice

The statement that introducing a policy of legislated rent controls will lead to a housing shortage is an example of a(n)

Choose correct answer/s
A
assumption.
B
prediction.
C
theory.
D
normative statement.
E
model.
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Question 20
Multiple Choice

Choose the statement that best characterizes an economic theory.A valid theory

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A
allows one to deduce a normative statement.
B
appeals to the law of large numbers.
C
generates a hypothesis that can predict future events.
D
extrapolates from the past behaviour of a variable to predict its future course.
E
allows one to prove irrefutably one's hypothesis.
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