Economists Acting as Scientists Make Positive Statements, While Economists Acting

question 65

True/False

Economists acting as scientists make positive statements, while economists acting as policy advisers make normative statements.

---

Definitions:

Money Demanded

The total amount of money that households and businesses want to hold at a given time, influenced by interest rates, income, and prices.

Interest Rate

The rate, calculated as a percentage of the principal, which a lender requires a borrower to pay for borrowing assets.

Money Market

A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded.

Excess Supply

A market condition where the quantity of a good supplied exceeds the quantity demanded at a given price, leading to surpluses.