Which of the following statements is positive?
Group of answer choices
When the Federal Reserve increases the money supply, interest rates decrease.
Large budget deficits should be avoided.
A tax cut that benefits low-income households is acceptable.
Higher taxes are needed to support education.
The standard of living in an economy is best measured by:
Group of answer choices
output per person.
average labor productivity.
total output.
the inflation rate.
If average labor productivity increases while population and the number of employed workers remain constant, then total output:
Group of answer choices
decreases.
may increase or decrease.
increases.
remains constant.
Profits, rents, interest, and royalties are examples of:
Group of answer choices
consumption.
investment.
capital income.
labor income.
Question 1
Positive statement refers to a statement that does not passes any value judgement. It presents the facts as they are and not as they should be.
In an economy when money supply increases then such increase in money supply given the demand for money leads to decrease in the interest rate.
So,
When the Federal Reserve increases the money supply, interest rates decrease is a positive statement.
Hence, the correct answer is the option (A).
Question 2
GDP per capita is a measure of the standard of living.
GDP implies total output produced in a country.
So,
It can be stated that output per person is the best measure of standard of living in a country.
Hence, the correct answer is the option (A).
Question 3
Increase in labor productivity implies an increase in output per worker.
With population and employment remaining constant, this increase in average labor productivity implies that each worker employed is now producing more.
This will result in more output.
So,
The correct answer is the option (C).
Question 4
Profits, rent, interest, and royalties are factor income associated with factors such as land, capital, entrepreneurship.
In production process, with respect to simplicity, these factors are grouped as capita.
So, these are examples of capital income.
Hence, the correct answer is the option (3).
Which of the following statements is positive? Group of answer choices When the Federal Reserve increases...
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Suppose that the Federal Reserve wants to decrease the money supply. Which of the following policies would achieve this goal? Group of answer choices Decrease the reserve requirement. Buy Treasury Bills from banks. Raise the Discount Rate. Decrease the interest rate paid on reserves held at the Fed.
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