8. "Inflation is less of a problem, over the long term, than unemployment." is an example of: A) a positive statement. B) a normative statement. C) a statement that could never be true. D) a statement that suffers from a logical error. E) none of the above. 9. "The income tax code of the United States has been written to be mildly progressive." is an example of: A) a positive statement. B) a normative statement. C) a statement that relates best to a command economy. D) the inefficiency of the market system. E) none of the above. | 10. What is the fundamental difference between macroeconomics and microeconomics? A) Macroeconomics involves studying the economy as a whole, while microeconomics involves studying the behavior of individual industries, firms, and households. B) Macroeconomics concentrates on those parts of the economy involving very large amounts of money, while microeconomics concentrates on those parts of the economy involving small sums of money. C) Macroeconomics studies the behavior of large firms, while microeconomics studies the behavior of small firms. D) There is no difference, basically macroeconomics and microeconomics are one6. The single word that best describes the fundamental essence of economics is: A) employment. B) inflation. C) prices. D) trade. E) scarcity. 7. Economic policies can be designed to fight which of the following economic problems? A) Inflation. B) Unemployment. C) Trade imbalance. D) All of the above.4. Of The following. economics may best be defined as the sTudy of: A) how To stretch The family dollar. B) how To make money in The stock market. C) The interpretation of scarce data. D) how scarce resources are used To produce various goods allocated among individuals in society. E) why resources are as scarce as They are. Lil Economic analysis: A) involves some simplifications of reality. B) is only vaguely related to reality because if it did so coincide. it would not still be Theory. C) is impossible. because of The impossibility of a controlled experiment. D) if it is good Theory. involves no simplification of reality. i5) involves so much distortion of reality as to be worthless. Ik-Iultiple Choice Questions 1 . in.) Which of the following is not a reason to study economics? A) To learn how people allocate scarce resources to produce goods. B) To learn how to trade off quantities of goods for quality of life. C) To learn a systematic model of economic principles for comprehending reality. D) To learn to avoid the fallacy of composition in analyses of public policy. E) All of the above are valid reasons for studying economics. [f you. as a farmer. have a bumper crop this year you will make more money. If all farmers have a bumper crop this year. all farmers will make more money. 1What kind of fallacy does this statement exhibit? A) post hp; fallacy. B) failure to hold other things constant fallacy. C) fallacy of composition. D) fallacy of normalcy. E) None ofthe above. The subject of economics includes: A) the study of activities involving money and exchange transactions among people. B) the study of the allocation of scarce resources to the production and distribution of goods and services. C) the study of wealth. D) the study of people in ordinary business life. earning and enjoying life. E) all ofthe above