Which of the Following Is an Example of a Positive

question 31

Multiple Choice

Which of the following is an example of a positive statement?

• A)Prices rise when the government prints too much money.
• B)If welfare payments increase, the world will be a better place.
• C)Inflation is more harmful to the economy than is unemployment.
• D)When public policies are evaluated, the benefits to the economy of improved equity should be considered more important than the costs of reduced efficiency.

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Definitions:

Economic Profits

The variance between total income and the aggregate of explicit and implicit costs for a business.

General Equilibrium

A state in an economy where all markets are in equilibrium simultaneously, and the decisions of consumers and producers are perfectly coordinated.

Pareto Efficiency

An economic state where resources are allocated in a way that it is impossible to make one individual better off without making another individual worse off.

Simultaneous Equilibrium

A situation in which multiple markets or economic variables reach equilibrium at the same time, with interdependencies considered.