Which of the Following Statements Is an Example of Positive

question 178

Multiple Choice

Which of the following statements is an example of positive economic analysis?

• A) The inflation rate is too high.
• B) The government should worry less about inflation and more about unemployment.
• C) If the government increases the rate of growth of the money supply, the inflation rate will increase, ceteris paribus.
• D) The elderly live on a fixed income, so the government has an obligation to keep inflation rates low.

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Definitions:

Short-Term Goal

A Short-Term Goal is an objective designed to be achieved in the near future, serving as a step towards a longer-term objective.

Fatigue

A state of persistent tiredness, often diminishing energy and motivation, that can be physical, mental, or a combination of both.

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it. (Also known as the I-knew-it-all-along phenomenon.)

Generalized Beliefs

Broad opinions or convictions that individuals hold without specific evidence or direct experience to support them.