Take Home Problem Set I (Chapters 123,6789) Summer 2016 (Protected View)- Word R
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Take Home Problem Set I (Chapters 123,6789) Summer 2016 (Protected View)- Word References Mailings Review View Tell me what you want to do ontain viruses Unless you need to edit,it's safer to stay in Protected View. Enable Editing Instructions Answer all questions. Label graphs completely. Show relevant work for full or partial credit. Point values are shown by each question. This is an individual (not group) exam. You may use the following resources for this exam: textbook, notes, course ma terial on Canvas, and the Sapling website Due Date and Time: Tuesday, June 8th at 11:45 pm. There is a 5 point per day penalty for the late submission of this assignment 1. Explain the difference between positive and normative statements and indicate whether the following statements are positive or normative (10 points) a. The unemployment rate in the U.S. is about 6.1% b. The unemployment rate in the U.S. is too high c. An increase in interest rates would encourage more household saving. d. Interest rates should be increased in order to encourage more bousehold saving. 2. Suppose a new immigration policy is implemented in the US that includes . provision production possibilities model (with capital goods osn that all people who are in the country illegally will be deported. Use the possibilities model (with capital goods on the vertical axis and consumer goods on the horizontal axis to illustrate and explain the likely effects of this poliey Include a graph in your answer.) (10 points)Explanation / Answer
Answer 1:
Positive and normative economics are the two branches of economic reasoning. It focuses on facts, cause and effect relationships including developing and testing economic theories. The statements are objective statements that can be amended, rejected or tested as per the evidence.
Normative statement is a subjective statement of opinion rather than fact that can be tested. Normative economics focuses on what the outcome of the economy or goal of public policy should be.
The positive statements are : a and c.
Normative statements are : b and d
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