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Lecture 2 Macro
Terms in this set (20)
A positive statement is one that states
Question 1 options:
what is, was, or will be.
what is and what should be.
what should be but is not.
what is desirable.
Suppose an economist tells you that the U.S. unemployment rate last year was 4.5 percent. This is an example of a(n) ________ statement.
Question 2 options:
Question 3 options:
are subjective opinions that cannot be proven.
should be the only basis for public policies.
can be tested and verified.
are basically the same for all individuals.
are the basis for all economic models.
An economic theory requires all of the following EXCEPT:
Question 4 options:
a set of definitions of the variables to be considered.
a set of assumptions about the conditions under which the theory applies.
a set of hypotheses about the relationships between the variables.
a set of value judgments to interpret the empirical evidence.
assumptions about motives of the people or firms involved.
Question 5 options:
is only useful if its underlying assumptions are realistic.
will be useful as long as it is logically consistent.
must be judged on its ability to explain and predict real-world phenomena.
will predict more accurately if it contains a greater number of mathematical equations.
will be useful only if all human behavior is rational.
Suppose an individual wheat farmer's income is influenced by the region's average daily temperature. When examining the determinants of individual farmer income, the average daily temperature is a(n) ________ variable.
Question 6 options:
Suppose that a particular theory predicts that on sunny days consumption will rise and that on cloudy days consumption will fall. If an economist tests this theory and finds that over a six-month period the theory predicts accurately, the economist would likely say
Question 7 options:
the theory has been proven correct.
the theory is always reliable.
the evidence fails to reject the theory.
the theory shouldn't be taken seriously.
that the theory is not useful because consumption involves irrational human behavior.
In order to test a theory, one must
Question 8 options:
develop a better explanation than the one presented.
present a series of normative statements and positive statements.
use assumptions that most closely reflect reality.
develop normative statements from the law of large numbers.
confront the predictions of the theory with evidence.
An economist collects data comparing per-capita expenditures on education across states for the year 2008. The best way to illustrate this data is
Question 9 options:
a time-series line graph.
a cross-sectional bar-chart graph.
a scatter diagram.
a logarithmic scale diagram.
a time-series bar chart diagram.
When it is said that variable A depends on variable B, then A is
Question 10 options:
a derivative of B.
proportional to B.
partially exclusive of B.
a function of B.
independent of B.
The statement "Y is a function of X" means that the
Question 11 options:
value of Y depends on that of X.
value of X depends on that of Y.
values of Y and X are the same.
values of Y and X are independent.
values of Y and X are related to some third variable.
On a coordinate graph, what is the Y intercept of the function X = 60 + 3Y?
Question 12 options:
"A decrease in the price of digital cameras will decrease the demand for camera film." This statement is an example of a positive economic statement.
Question 19 options:
"The distribution of income should be determined by the government" is an example of a positive economic statement.
Question 20 options:
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