How economists approach the world

Which of the following is not a positive economic statement?

• As household incomes rise the demand for branded clothing increases

• It is good to see the demand for cigarettes decline over time

• A fall in the price of broadband increases the demand for Netflix

• Decreasing the price of orange juice increases the quantity demanded for it

Which of the following is not a normative economic statement?

• It is important for governments to reduce income inequality

• Society ought to reduce levels of poverty

• The government should cut spending to decrease the budget deficit

• Cutting taxation benefits the rich more than the poor

Which economist believed that allowing free laissez-faire markets increased incomes throughout the population?

• Karl Marx

• Adam Smith

• John Maynard Keynes

• Jean Baptiste Say

Which law states that producing goods and services creates demand?

• Law of supply

• Law of diminishing returns

• Law of demand

• Say's law

Which of the following facts about John Maynard Keynes is incorrect?

• He thought it was important for governments to manage the economy

• He believed free markets should be left to solely determine the allocation of resources in an economy

• He wrote 'The General Theory of Employment, Interest and Money'

• He was involved in developing government macroeconomic policy

Which of the following is not an example of empirical evidence?

• Managers at a business who believe that reducing the price of their product will significantly increase its quantity demanded

• A graph that shows the positive correlation between household income and new car sales

• Figures that show that reducing taxation in a country has led to an increase in its budget deficit in each of the last 10 years

• House price data that shows a negative relationship between house prices and interest rates

Which one of the following is a positive economic statement?

• Income inequality in Europe has increased over the last 30 years

• The rate of inflation is too high

• The US government should increase the national minimum wage rate to $15

• Investment bankers earn too much

Which of the following economists is most likely to support free-market solutions to economic problems?

• Kate Raworth

• Karl Marx

• Adam Smith

• John Maynard Keynes

Which one of the following is a normative economic statement?

• Increased spending on electric vehicles will reduce carbon emissions

• Government should use carbon taxes to reduce carbon emissions

• Prices in a competitive market are likely to be lower than a monopoly

• Individuals consume goods to maximize their satisfaction

Which economist is most likely to challenge the view that individuals always behave rationally?

• Richard Thaler

• Adam Smith

• John Maynard Keynes

• Jean Baptiste Say