Which of the Following Are Positive Economic Statements and Which

question 133

Essay

Which of the following are positive economic statements and which are normative economic statements?
a.An increase in the price of petrol will decrease the quantity of petrol purchased.
b.The government should eliminate the minimum wage.
c.All states should raise the minimum wage to at least $10 per hour.
d.The government should scrap its current income tax structure in favour of a flat tax.
e.Unemployment has increased since the onset of the recession.
f.The government should not bail out investment banks during a financial crisis.
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Definitions:

Risk-Aversion Coefficients

Numerical measures quantifying an investor's tolerance for risk, impacting their investment choices and portfolio management.

Treynor-Black Model

A portfolio optimization model that blends a passively managed market index and active stock selections to maximize performance.

Nonsystematic Standard Deviation

A measure of the variability of an investment's return due to factors specific to the investment or its issuer, excluding broader market influences.

Macroeconomic Risks

Considered broad economic or political uncertainties that could affect the performance of financial markets and investments globally.