Question 1

Economists view positive statements as

Accepted Answer

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.E) C) and D)
F) A) and D)

Question 2

Which of the following statements is an example of a positive,as opposed to normative,statement?

Accepted Answer

A)  Americans deserve a cleaner environment.
B)  Reducing emissions reduces days missed from school due to asthma.
C)  All Americans are entitled to quality health care.
D)  Economic policies should focus on improving equality.E) All of the above
F) B) and D)

Question 3

The Council of Economic Advisers

Accepted Answer

A)  was created in 1776 and consists of three members and a staff of several dozen economists.
B)  was created in 1776 and consists of thirty members and a staff of a dozen economists.
C)  was created in 1946 and consists of three members and a staff of several dozen economists.
D)  was created in 1946 and consists of thirty members and a staff of a dozen economists.E) B) and D)
F) B) and C)

Question 4

Duties of the Council of Economic Advisers include

Accepted Answer

A)  advising the president and writing the annual Economic Report of the President.
B)  implementing the president's tax policies.
C)  tracking the behavior of the nation's money supply.
D)  All of the above are correct.E) B) and D)
F) C) and D)

Question 5

Economists at which of the following offices help formulate spending plans and regulatory policies?

Accepted Answer

A)  Office of Management and Budget
B)  Department of the Treasury
C)  Congressional Budget Office
D)  The Federal ReserveE) A) and C)
F) B) and C)

Question 6

Which of the following is an example of a normative,as opposed to positive,statement?

Accepted Answer

A)  Universal health care would be good for U.S.citizens.
B)  An increase in the cigarette tax would cause a decrease in the number of smokers.
C)  A decrease in the minimum wage would decrease unemployment.
D)  A law requiring the federal government to balance its budget would increase economic growth.E) None of the above
F) B) and C)

Question 7

When economists make positive statements,they are

Accepted Answer

A)  speaking as scientists.
B)  speaking as policy advisers.
C)  making claims about how the world should be.
D)  revealing that they are very conservative in their views of how the world works.E) None of the above
F) B) and D)

Question 8

One way to characterize the difference between positive statements and normative statements is as follows:

Accepted Answer

A)  Positive statements tend to reflect optimism about the economy and its future,whereas normative statements tend to reflect pessimism about the economy and its future.
B)  Positive statements offer descriptions of the way things are,whereas normative statements offer opinions on how things ought to be.
C)  Positive statements involve advice on policy matters,whereas normative statements are supported by scientific theory and observation.
D)  Economists outside of government tend to make normative statements,whereas government-employed economists tend to make positive statements.E) A) and B)
F) B) and C)

Question 9

A positive economic statement such as "Pollution taxes decrease the quantity of pollution firms generate"

Accepted Answer

A)  would likely be made by an economist acting as a policy adviser.
B)  would require values and data to be evaluated.
C)  would require data but not values to be evaluated.
D)  could not be evaluated by economists acting as scientists.E) C) and D)
F) None of the above

Question 10

The Federal Reserve

Accepted Answer

A)  designs tax policy.
B)  enforces the nation's antitrust laws.
C)  sets the nation's monetary policy.
D)  analyzes data on workers.E) None of the above
F) A) and D)

Question 11

Analysis of data on workers and those looking for work is conducted by economists at the

Accepted Answer

A)  Office of Management and Budget.
B)  Department of Labor.
C)  Congressional Budget Office.
D)  Department of the Treasury.E) B) and D)
F) None of the above

Question 12

The president of the United States receives tax policy advice from economists in the

Accepted Answer

A)  Federal Reserve.
B)  Department of Justice.
C)  Department of the Treasury.
D)  Congressional Budget Office.E) A) and B)
F) B) and D)

Question 13

Which of the following is an example of a normative - as opposed to a positive - statement?

Accepted Answer

A)  The discount rate is the interest rate the Federal Reserve charges banks to borrow funds.
B)  The US income tax rate increases with the amount of income earned.
C)  The government should increase the tax on gasoline.
D)  The US unemployment rate increased to 10 percent in 2009.E) C) and D)
F) B) and D)

Question 14

Economists speaking like scientists make

Accepted Answer

A)  positive statements.
B)  prescriptive statements.
C)  claims about how the world should be.
D)  More than one of the above is correct.E) A) and C)
F) All of the above

Question 15

The Council of Economic Advisers

Accepted Answer

A)  was created in 1946.
B)  advises the president of the United States on economic policy matters.
C)  writes the annual Economic Report of the President.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 16

"Prices rise when the quantity of money rises rapidly" is an example of a

Accepted Answer

A)  negative economic statement.
B)  positive economic statement.
C)  normative economic statement.
D)  statement that contradicts one of the basic principles of economics.E) A) and B)
F) None of the above

Question 17

Which of the following statements is correct about the roles of economists?

Accepted Answer

A)  Economists are best viewed as policy advisers.
B)  Economists are best viewed as scientists.
C)  In trying to explain the world,economists are policy advisers;in trying to improve the world,they are scientists.
D)  In trying to explain the world,economists are scientists;in trying to improve the world,they are policy advisers.E) A) and C)
F) A) and B)

Question 18

Which of the following is a positive,as opposed to a normative,statement?

Accepted Answer

A)  The US Department of Justice should allow a merger between AT&T and T-Mobile because it would have little effect on consumers.
B)  Antitrust laws should be used to prevent further concentration in the wireless telephone service market.
C)  The US Department of Justice sued AT&T to block its merger with T-Mobile.
D)  The wireless telephone service market is too highly concentrated.E) None of the above
F) A) and B)

Question 19

In principle,we can

Accepted Answer

A)  ignore positive statements when choosing among various public policy alternatives.
B)  ignore normative statements when choosing among various public policy alternatives.
C)  confirm or refute positive statements by examining evidence.
D)  confirm or refute normative statements by examining evidence.E) None of the above
F) C) and D)

Question 20

Normative statements are

Accepted Answer

A)  prescriptive,whereas positive statements are descriptive.
B)  descriptive,whereas positive statements are prescriptive.
C)  backward-looking,whereas positive statements are forward-looking.
D)  forward-looking,whereas positive statements are backward-looking.E) A) and B)
F) None of the above

Exam 2: Thinking Like an Economist: The Economist As Policy Adviser

When economists make positive statements,they are

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A positive economic statement such as "Pollution taxes decrease the quantity of pollution firms generate"

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In principle,we can

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Which of the following statements is correct about the roles of economists?

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Which of the following is a positive,as opposed to a normative,statement?

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Economists speaking like scientists make

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Which of the following statements is an example of a positive,as opposed to normative,statement?

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One way to characterize the difference between positive statements and normative statements is as follows:

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The Council of Economic Advisers

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The Council of Economic Advisers

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Normative statements are

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The president of the United States receives tax policy advice from economists in the

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Analysis of data on workers and those looking for work is conducted by economists at the

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"Prices rise when the quantity of money rises rapidly" is an example of a

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The Federal Reserve

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Which of the following is an example of a normative - as opposed to a positive - statement?

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Which of the following is an example of a normative,as opposed to positive,statement?

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Duties of the Council of Economic Advisers include

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Economists view positive statements as

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Economists at which of the following offices help formulate spending plans and regulatory policies?

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