Which is an example of a normative question?

Which is an example of a normative question?

For example, speaking again about minimum wage laws, a positive question would be “Do higher minimum wages cause higher rates of youth unemployment?”, whereas a normative question might be “Are higher minimum wages better for young workers?” The first of those two questions should have a testable answer: yes or no.

Which topic is a macroeconomic topic?

Macroeconomists study topics such as GDP, unemployment rates, national income, price indices, output, consumption, unemployment, inflation, saving, investment, energy, international trade, and international finance. Macroeconomics and microeconomics are the two most general fields in economics.

Which topic is a microeconomic topic?

Microeconomics covers a wide variety of topics, for example, supply and demand, opportunity cost, elasticity, market structures, the theory of production, entrepreneurship, labor market, pricing etc. These large topics include a lot of subtopics, and you can choose them for your research.

Which of these would not be considered a factor of production?

Goods and services are not factors of production. Factors of production are inputs that are needed to provide goods or services. They include, land, labor, capital, and entrepreneurship.

Which is the most scarce factor of production?

capital

What increases the GDP?

Understanding Gross Domestic Product (GDP) The GDP of a country tends to increase when the total value of goods and services that domestic producers sell to foreign countries exceeds the total value of foreign goods and services that domestic consumers buy. In this situation, the GDP of a country tends to decrease.

What are the factors that affect economic growth?

Economists generally agree that economic development and growth are influenced by four factors: human resources, physical capital, natural resources and technology. Highly developed countries have governments that focus on these areas.

What directly affects GDP?

Gross domestic product (GDP) measures the total output of an entire economy by adding up total consumption, investment, government expenditure, and net exports. GDP is therefore considered a quality approximation of income for an entire economy in a given period.

What makes a strong economy?

What makes a good economy? A strong labor market, predominantly, though the public also values lower inflation, more economic growth, and a stronger dollar.

What causes GDP to decrease?

Any reduction in customer spending will cause a decrease in GDP. Customers spend more or less depending on their disposable income, inflation, tax rate and the level of household debt. Wage growth, for example, encourages more expensive purchases, leading to an increase in real GDP.

What happens if the GDP decreases?

If GDP falls from one quarter to the next then growth is negative. This often brings with it falling incomes, lower consumption and job cuts. The economy is in recession when it has two consecutive quarters (i.e. six months) of negative growth.

What does negative GDP indicate?

Key Takeaways. Negative growth is a decline in a company’s sales or earnings, or a decrease in an economy’s GDP during any quarter. Declining wage growth and a contraction of the money supply are characteristics of negative growth, and economists view negative growth as a sign of a possible recession or depression.

At which point is real GDP at its highest?

Local maximum of a business cycle. The peak of the cycle refers to the last month before several key economic indicators, such as employment and new housing starts, begin to fall. It is at this point that real GDP spending in an economy is its highest level.

What are the 4 phases of business cycle?

The four stages of the economic cycle are also referred to as the business cycle. These four stages are expansion, peak, contraction, and trough.

Why do you suppose the GDP is much higher today than 50 to 100 years ago?

Why do you suppose that U.S. GDP is so much higher today than 50 to 100 years ago? The U.S. now has better technology, more labor, and more capital.

What is the lowest level of recession?

The highest point of the economy, before a recession begins, is called the peak; conversely, the lowest point of a recession, before a recovery begins, is called the trough. Thus, a recession lasts from peak to trough, and an economic upswing runs from trough to peak.

What are the five stages of recession?

There are five stages in a recession.

• job loss.
• falling production.
• falling demand (occurs twice)
• peak production.

What defines a depression vs Recession?

Recession. A recession is a normal part of the business cycle that generally occurs when GDP contracts for at least two quarters. A depression, on the other hand, is an extreme fall in economic activity that lasts for years, rather than just several quarters.

Is a depression worse than a recession?

A recession is a decline in economic activity spread across the economy that lasts more than a few months. A depression is a more extreme economic downturn, and there has only been one in US history: The Great Depression, which lasted from 1929 to 1939.

Does a depression always follow a recession?

Does a depression always follow a recession? No, a depression is indicated when the recession is exceptionally long.

What unemployment rate is considered a depression?

A “depression” label could be appropriate if the unemployment rate exceeds 20% for a long period of time.

What is worse than a recession?

A recession is a widespread economic decline that lasts for several months. 1 A depression is a more severe downturn that lasts for years.

Why did so many banks fail during the Great Depression?

Deflation increased the real burden of debt and left many firms and households with too little income to repay their loans. Bankruptcies and defaults increased, which caused thousands of banks to fail. In each year from 1930 to 1933, more than 1,000 U.S. banks closed.