Positive
v. Normative
Self-Test
Indicate whether each of
the following is a positive or a normative economics statement. How do you determine which?
1.
The
2.
As a result of past budget deficits, the
3.
The government needs to balance its
budget
4.
Between January 2000 and March 2003, the
Dow Jones Industrial Average lost more than 4000 points—that is, it went down
by more than one third.
5.
The Dow has been doing really bad.
6.
The Federal Reserve did not lower
interest rates at either of its last two meetings.
7.
Considering the shape that the economy
is in, the Fed should be lowering interest rates.
8.
Bill Gates made the Forbes list this
year as the world’s richest person—he’s a multi-billionaire
9.
Nobody needs or deserves that much money
10. Commerce needs some new and better
restaurants
11. As the price of gasoline rises, people
respond by buying less of it, though not that much less.
12. It is not fair that oil companies should get
rich just because we need gasoline to drive to school
13. It also is not fair that students who study
more make higher grades than those who are too busy to study.
14. Demand curves slope downward to the right
15.
Other things the same, the more you eat, the more you weigh.