Applied Economics: Economics as an Applied Science
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Questions and Answers

What is the primary focus of applied economics?

  • Applying economic principles to real-world situations (correct)
  • Analyzing historical economic data
  • Studying the behavior of individual consumers
  • Developing new economic theories

    • Which of the following is a key characteristic of positive economics?

  • It makes value judgments about economic policies
  • It relies on objective analysis of data (correct)
  • It prescribes what economic policies should be implemented
  • It focuses on the normative aspects of economics

    • Which of the following is an example of a positive economic statement?

  • The government should raise the minimum wage to improve living standards
  • Parents tend to enroll their children in private schools more when they get a raise or promotion (correct)
  • Parents should enroll their children in private schools to ensure a better education
  • Inflation is a harmful economic phenomenon that should be avoided

    • Which of the following statements best describes the difference between positive and normative economics?

    <p>Positive economics deals with what is, while normative economics deals with what ought to be</p> Signup and view all the answers

    What is the primary purpose of the scientific method in economics?

    <p>To test hypotheses and answer economic questions</p> Signup and view all the answers

    What is the key distinction between positive and normative economics?

    <p>Positive economics focuses on how the world is, while normative economics focuses on how the world should be.</p> Signup and view all the answers

    Why are normative economic statements difficult to test?

    <p>They are based on opinions rather than empirical data.</p> Signup and view all the answers

    What does Gross National Product (GNP) measure?

    <p>The total income earned by a country's citizens, including income from abroad.</p> Signup and view all the answers

    Which of the following is an example of a normative economic statement?

    <p>The government should raise the minimum wage to $15 per hour.</p> Signup and view all the answers

    How does Gross National Product (GNP) differ from Gross Domestic Product (GDP)?

    <p>GNP includes income earned from assets abroad, while GDP does not.</p> Signup and view all the answers

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