Deck 2: 2: Sec 22 Mc the Economist As Policy Adviser

Question 1

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.

Answer 1

A

Question 2

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.

Answer 2

D

Question 3

Positive statements are not

A)descriptive.
B)prescriptive.
C)claims about how the world is.
D)made by economists speaking as scientists.

Answer 3

C

Question 4

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.

Question 5

Normative statements are not

A)descriptive.
B)prescriptive.
C)claims about how the world should be.
D)made by economists speaking as policy advisers.

Question 6

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.

Question 7

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.

Question 8

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.

Question 9

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.

Question 10

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.

Question 11

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.

Question 12

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.

Question 13

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.

Question 14

When an economist is asked a question like "why is unemployment higher for teenagers than for older workers?" the economist

A)is asked to explain the cause of an economic event.
B)is asked to recommend a policy to improve economic outcomes.
C)is asked as a policy adviser.
D)does not have enough information to respond.

Question 15

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.

Question 16

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.

Question 17

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.

Question 18

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.

Question 19

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.

Question 20

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.

Question 21

"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.

Question 22

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.

Question 23

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.

Question 24

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.

Question 25

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.

Question 26

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.

Question 27

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.

Question 28

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.

Question 29

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.

Question 30

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.

Question 31

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.

Question 32

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.

Question 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.

Question 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.

Question 35

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.

Question 36

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.

Question 37

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.

Question 38

"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.

Question 39

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.

Question 40

Which of the following is an example of a normative,as opposed to positive,statement?

A)Gasoline prices ought to be lower than they are now.
B)The federal government should raise taxes on wealthy people.
C)The social security system is a good system and it deserves to be preserved as it is.
D)All of the above are normative statements.

Question 41

Duties of the Council of Economic Advisers include

A)advising the president and writing the annual Economic Report of the President.
B)implementing the president's tax policies.
C)tracking the behavior of the nation's money supply.
D)All of the above are correct.

Question 42

The president of the United States receives tax policy advice from economists in the

A)Federal Reserve.
B)Department of Justice.
C)Department of the Treasury.
D)Congressional Budget Office.

Question 43

Analysis of data on workers and those looking for work is conducted by economists at the

A)Office of Management and Budget.
B)Department of Labor.
C)Congressional Budget Office.
D)Department of the Treasury.

Question 44

A duty of economists at the Department of Labor is to

A)analyze data on workers.
B)schedule federal holidays.
C)enforce the nation's antitrust laws.
D)All of the above are correct.

Question 45

The Council of Economic Advisers

A)was created in 1776 and consists of three members and a staff of several dozen economists.
B)was created in 1776 and consists of thirty members and a staff of a dozen economists.
C)was created in 1946 and consists of three members and a staff of several dozen economists.
D)was created in 1946 and consists of thirty members and a staff of a dozen economists.

Question 46

The nation's antitrust laws are enforced by economists at the Department of

A)Labor.
B)Health and Human Services.
C)Justice.
D)Treasury.

Question 47

Some,but not all,government economists are employed within the administrative branch of government.Which of the following government agencies employs economists outside of the administrative branch?

A)the Department of Labor
B)the Department of the Treasury
C)the Congressional Budget Office
D)the Council of Economic Advisers

Question 48

Which of the following is an example of a normative,as opposed to positive,statement?

A)Following the most recent recession,the economy is recovering at a slower than usual pace.
B)To stimulate the economy during the most recent recession,the federal government increased spending.
C)In response to the most recent recession,the federal government extended the duration of unemployment benefits.
D)The federal government's responses to the most recent recession were insufficient.

Question 49

The design of tax policy is one of the responsibilities of economists who work at the

A)Council of Economic Advisers.
B)Federal Reserve.
C)Department of the Treasury.
D)Congressional Budget Office.

Question 50

Economists at the Department of Justice

A)track the behavior of the nation's money supply.
B)advise Congress on economic matters.
C)help enforce the nation's antitrust laws.
D)prepare the federal budget.

Question 51

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

A)the Federal Reserve
B)the Congressional Budget Office
C)the Department of the Treasury
D)the Department of Commerce

Question 52

Which of the following is an example of a normative,as opposed to positive,statement?

A)If the price of a product decreases,people's willingness to buy that product will increase.
B)Reducing tax rates on the wealthy would benefit the nation.
C)If the national saving rate were to increase,so would the rate of economic growth.
D)The elimination of trade restrictions would increase an economy's standard of living.

Question 53

Economists at which of the following offices help formulate spending plans and regulatory policies?

A)Office of Management and Budget
B)Department of the Treasury
C)Congressional Budget Office
D)The Federal Reserve

Question 54

The Economic Report of the President

A)discusses recent developments in the economy and presents analysis of current policy issues.
B)is written by the Council of Economic Advisers.
C)is the responsibility of the economists at the Office of Management and Budget.
D)Both a and b are correct.

Question 55

The Council of Economic Advisers

A)was created in 1946.
B)advises the president of the United States on economic policy matters.
C)writes the annual Economic Report of the President.
D)All of the above are correct.

Question 56

Which of the following is the best explanation for why President Harry Truman once said that he wanted to find a one-armed economist?

A)President Truman received input from so many economists that he only wanted one view from each.
B)President Truman thought economists should analyze policies but not make or enforce them.
C)Economists understand that most policy decisions involve trade-offs so they are likely to present multiple views of policies.
D)A one-armed economist would conduct only positive analysis and no normative analysis.

Question 57

Economists at the Department of the Treasury

A)design U.S.currency and coins.
B)provide Congress with the annual budget.
C)enforce the U.S.antitrust laws.
D)provide advice on tax policy to the President.

Question 58

President Truman once said he wanted to find a one-armed economist because when he asked his economists for advice,they always answered,"On the one hand,...On the other hand,..." Truman's observation that economists' advice is not always straightforward

A)is rooted in the principle that people face tradeoffs.
B)indicates that economists recognize that there are opportunity costs associated with policy decisions.
C)confirms that economists are not suited to be presidential advisers.
D)More than one of the above is correct.

Question 59

In addition to advising the president,one duty of the Council of Economic Advisers is to

A)prepare the federal budget.
B)write government regulations.
C)advise Congress on economic matters.
D)write the annual Economic Report of the President.

Question 60

Which of the following is an example of a normative - as opposed to a positive - statement?

A)The discount rate is the interest rate the Federal Reserve charges banks to borrow funds.
B)The US income tax rate increases with the amount of income earned.
C)The government should increase the tax on gasoline.
D)The US unemployment rate increased to 10 percent in 2009.

Question 61

Congress relies on economists at the Congressional Budget Office to

A)enforce the nation's antitrust laws.
B)set the nation's monetary policy.
C)provide evidence that incumbent members of Congress are performing well in their jobs.
D)provide independent evaluations of policy proposals.

Question 62

The Federal Reserve

A)designs tax policy.
B)enforces the nation's antitrust laws.
C)sets the nation's monetary policy.
D)analyzes data on workers.

Question 63

The President receives economic policy advice from economists at each of the following except

A)the Council of Economic Advisors.
B)the Department of the Treasury.
C)the Congressional Budget office.
D)the Department of Labor.

Question 64

John Maynard Keynes believed the ideas of economists to be

A)generally incorrect.
B)powerful.
C)academic and without practical application.
D)rantings of madmen.

Question 65

Economists hold many positions advising the president and Congress including

A)being a member of the Council of Economic Advisers.
B)helping to enforce antitrust laws at the Department of Justice.
C)conducting research at the Congressional Budget Office.
D)All of these are possible positions that economists hold.

Question 66

Which of the following is an example of a normative,as opposed to positive,statement?

A)The growth rate of the economy last year was higher than any other year in the last decade.
B)The federal government reduced spending in the last quarter of the fiscal year.
C)The Federal Reserve Bank adjusted interest rates in response to the lower-than-expected growth rate of the economy.
D)The federal government should decrease unemployment benefits to stimulate the economy out of the recession.

Question 67

Which of the following is an example of a positive,as opposed to normative,statement?

A)The federal government should decrease coverage of unemployment benefits to stimulate the economy out of the recession.
B)Congress should agree on lower government spending for the next fiscal year.
C)The Federal Reserve Bank should increase interest rates in response to the higher-than-expected inflation in the economy.
D)The unemployment rate last year was lower than any other year in the last century.