1. When economists are trying to explain the world, they are
a.
scientists.
b.
policy advisers.
c.
in the realm of microeconomics rather than macroeconomics.
d.
in the realm of normative economics rather than positive economics.
2. When economists are trying to help improve the world, they are
a.
in the realm of positive economics rather than normative economics.
b.
in the realm of macroeconomics rather than microeconomics.
c.
scientists.
d.
policy advisers.
3. Which of the following statements is correct about the roles of economists?
a.
Economists are best viewed as policy advisers.
b.
Economists are best viewed as scientists.
c.
In trying to explain the world, economists are policy advisers; in trying to improve the world, they are
scientists.
d.
In trying to explain the world, economists are scientists; in trying to improve the world, they are policy
advisers.
4. When an economist is asked a question like “why is unemployment higher for teenagers than for older workers?” the
economist
a.
b.
c.
d.
5. The difference between economists speaking as scientists or policy advisers boil down to the difference between
a.
assumptions and theories.
b.
true statements and false statements.
c.
specific statements and general statements.
d.
positive statements and normative statements.
6. Normative statements are
a.
prescriptive, whereas positive statements are descriptive.
b.
descriptive, whereas positive statements are prescriptive.
c.
backward-looking, whereas positive statements are forward-looking.
d.
forward-looking, whereas positive statements are backward-looking.
7. Positive statements are
a.
prescriptive.
b.
claims about how the world should be.
c.
claims about how the world is.
d.
made by economists speaking as policy advisers.
8. Normative statements are
a.
not usually made by economists.
b.
claims about how the world should be.
c.
claims about how variables in the economy normally behave.
d.
pessimistic interpretations of the economy.
9. Positive statements are not
a.
descriptive.
b.
prescriptive.
c.
claims about how the world is.
d.
made by economists speaking as scientists.
10. Normative statements are not
a.
descriptive.
b.
prescriptive.
c.
claims about how the world should be.
d.
made by economists speaking as policy advisers.
11. A statement describing how the world is
a.
is a normative statement.
b.
is a positive statement.
c.
would only be made by an economist speaking as a policy adviser.
d.
would only be made by an economist employed by the government.
12. A statement describing how the world should be
a.
is a normative statement.
b.
is a positive statement.
c.
would only be made by an economist speaking as a scientist.
d.
would only be made by an economist employed by the government.
13. One way to characterize the difference between positive statements and normative statements is as follows:
a.
Positive statements tend to reflect optimism about the economy and its future, whereas normative statements
tend to reflect pessimism about the economy and its future.
b.
Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on
how things ought to be.
c.
Positive statements involve advice on policy matters, whereas normative statements are supported by scientific
theory and observation.
d.
Economists outside of government tend to make normative statements, whereas government-employed
economists tend to make positive statements.
14. Economists view positive statements as
a.
affirmative, justifying existing economic policy.
b.
optimistic, putting the best possible interpretation on things.
c.
descriptive, making a claim about how the world is.
d.
prescriptive, making a claim about how the world ought to be.
15. Economists view normative statements as
a.
prescriptive, making a claim about how the world ought to be.
b.
descriptive, making a claim about how the world is.
c.
statements about the normal condition of the world.
d.
pessimistic, putting the worst possible interpretation on things.
16. Economists speaking like scientists make
a.
normative statements.
b.
prescriptive statements.
c.
claims about how the world is.
d.
claims about how the world should be.
17. Economists speaking like policy advisers make
a.
positive statements.
b.
descriptive statements.
c.
claims about how the world is.
d.
claims about how the world should be.
18. Economists speaking like scientists make
a.
positive statements.
b.
prescriptive statements.
c.
claims about how the world should be.
d.
More than one of the above is correct.
19. Economists speaking like policy advisers make
a.
claims about how the world is.
b.
descriptive statements.
c.
normative statements.
d.
More than one of the above is correct.
20. When economists make positive statements, they are
a.
speaking as scientists.
b.
speaking as policy advisers.
c.
making claims about how the world should be.
d.
revealing that they are very conservative in their views of how the world works.
21. When economists make normative statements, they are
a.
speaking as scientists.
b.
speaking as policy advisers.
c.
making claims about how the world is.
d.
revealing that they are very liberal in their views of how the world works.
22. When economists make
a.
positive statements, they are speaking not as policy advisers but as scientists.
b.
positive statements, they are speaking not as scientists but as forecasters.
c.
normative statements, they are speaking not as policy advisers but as scientists.
d.
normative statements, they are speaking not as policy advisers but as model-builders.
23. When economists make
a.
positive statements, they are speaking not as scientists but as policy advisers.
b.
positive statements, they are speaking not as scientists but as forecasters.
c.
normative statements, they are speaking not as scientists but as policy advisers.
d.
normative statements, they are speaking not as policy advisers but as model-builders.
24. You know an economist has crossed the line from policy adviser to scientist when he or she
a.
claims that the problem at hand is widely misunderstood by non-economists.
b.
makes positive statements.
c.
talks about values.
d.
makes a claim about how the world should be.
25. You know an economist has crossed the line from scientist to policy adviser when he or she
a.
claims that the problem at hand is widely misunderstood by non-economists.
b.
talks about the evidence.
c.
makes normative statements.
d.
makes a claim about how the world is.
26. A positive economic statement such as “Pollution taxes decrease the quantity of pollution firms generate”
a.
would likely be made by an economist acting as a policy adviser.
b.
would require values and data to be evaluated.
c.
would require data but not values to be evaluated.
d.
could not be evaluated by economists acting as scientists.
27. A normative economic statement such as “The minimum wage should be abolished”
a.
would likely be made by an economist acting as a scientist.
b.
would require values and data to be evaluated.
c.
would require data but not values to be evaluated.
d.
could not be evaluated by economists acting as policy advisers.
28. In principle, we can
a.
ignore positive statements when choosing among various public policy alternatives.
b.
ignore normative statements when choosing among various public policy alternatives.
c.
confirm or refute positive statements by examining evidence.
d.
confirm or refute normative statements by examining evidence.
29. Which of the following is not correct?
a.
Evaluating statements about how the world should be involves values as well as facts.
b.
Positive statements can, in principle, be confirmed or refuted by examining evidence.
c.
Normative statements can be judged using data alone.
d.
Deciding what is good or bad policy is not just a matter of science.
30. When an economist evaluates a positive statement, he or she is primarily
a.
examining evidence.
b.
acting as a scientist.
c.
concerned with verifying how the world is.
d.
All of the above are correct.
31. Normative conclusions
a.
come from positive analysis alone.
b.
are based on ignorance of positive analysis.
c.
involve value judgments.
d.
reflect the economist’s role as scientist.
32. Which of the following is an example of a positive, as opposed to normative, statement?
a.
Inflation is more harmful to the economy than unemployment is.
b.
If welfare payments increase, the world will be a better place.
c.
Prices rise when the government prints too much money.
d.
When public policies are evaluated, the benefits to the economy of improved equality should be considered
more important than the costs of reduced efficiency.
33. Which of the following is an example of a positive, as opposed to normative, statement?
a.
When the minimum wage is increased, unemployment is a predictable consequence.
b.
The income tax rate should be increased to offset the budget deficit.
c.
Increasing government spending is the best way to help the economy move out of a recession.
d.
More than one of the above are positive statements.
34. Which of the following is a positive, as opposed to a normative, statement?
a.
The US Department of Justice should allow a merger between AT&T and T-Mobile because it would have
little effect on consumers.
b.
Antitrust laws should be used to prevent further concentration in the wireless telephone service market.
c.
The US Department of Justice sued AT&T to block its merger with T-Mobile.
d.
The wireless telephone service market is too highly concentrated.
35. Which of the following statements is an example of a positive, as opposed to normative, statement?
a.
Americans deserve a cleaner environment.
b.
Reducing emissions reduces days missed from school due to asthma.
c.
All Americans are entitled to quality health care.
d.
Economic policies should focus on improving equality.
36. “Ensuring that Social Security is financially sound for future generations is an important use of taxpayer dollars” is an
example of a
a.
normative economic statement.
b.
positive economic statement.
c.
statement made by an economist working as a scientist.
d.
judgment based on evaluation of evidence, not values.
37. “Prices rise when the quantity of money rises rapidly” is an example of a
a.
negative economic statement.
b.
positive economic statement.
c.
normative economic statement.
d.
statement that contradicts one of the basic principles of economics.
38. Which of the following is not an example of a positive, as opposed to normative, statement?
a.
Higher gasoline prices will reduce gasoline consumption.
b.
Equality is more important than efficiency.
c.
Trade restrictions lower our standard of living.
d.
If a nation wants to avoid inflation, it will restrict the growth rate of the quantity of money.
39. Which of the following is an example of a normative, as opposed to positive, statement?
a.
Universal health care would be good for U.S. citizens.
b.
An increase in the cigarette tax would cause a decrease in the number of smokers.
c.
A decrease in the minimum wage would decrease unemployment.
d.
A law requiring the federal government to balance its budget would increase economic growth.