Which Description of Positive Statements Is the Most Accurate

question 127

Multiple Choice

Which description of positive statements is the most accurate?

• A) They are optimistic, putting the best possible interpretation on things.
• B) They are descriptive, making claims about how the world is.
• C) They are prescriptive, making claims about how the world ought to be.
• D) They are affirmative, justifying existing economic policy.

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Definitions:

Efficiency Wages

A higher wage paid by employers to increase worker productivity and loyalty, reducing turnover and shirking.

Substitution Effect

The change in quantity demanded of a good due to a change in its price, causing consumers to substitute it with other similar goods.

Labor Supplied

Refers to the total hours that workers are willing and able to work at a given wage rate, in a given time period.

Income Effect

Describes how a change in an individual's income affects their purchasing decisions.