Which of the Following Is a Positive Economic Statement

question 31

Multiple Choice

Which of the following is a positive economic statement?

• A)Everyone should live at the same standard of living.
• B)If the price of gasoline rises,a smaller quantity of it will be bought.
• C)The government should close income tax loopholes.
• D)U.S.firms should not be allowed to outsource production of goods and services.

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Definitions:

MPC (Marginal Propensity to Consume)

A measure of the change in consumption resulting from a change in income; specifically, the proportion of additional income that is spent on consumption.

Multiplier

A factor by which an initial change in spending will alter total economic output by a greater amount.

Multiplier Effect

The proportionate increase in final income that results from an injection of spending (initial increase in spending), typically influencing the level of national income and output.

Government Builds

Refer to initiatives or infrastructure projects undertaken by a government to develop or enhance the country's physical assets and services.