Which of the following statements is positive?
A)When the Federal Reserve increases the money supply, interest rates decrease.
B)Large budget deficits should be avoided.
C)Higher taxes are needed to support education.
D)A tax cut that benefits low-income households is acceptable.

Question

Quizplus · Accepted Answer

Positive analysis aims at determining only the economic consequences of a particular event, not whether those consequences are desirable. Economic theory suggests, as you will learn later in this course, that when the Federal Reserve increases the money supply, interest rates decrease.

Which of the Following Statements Is Positive