6. Classify each of the following statements as positive ornormative. Explain.a. Society faces a short-run trade-off between inflationand unemployment.b. A reduction in the rate of money growth willreduce the rate of inflation.c. The Federal Reserve should reduce the rate ofmoney growth.d. Society ought to require welfare recipients to lookfor jobs.e. Lower tax rates encourage more work and moresaving.

Question
Asked Sep 25, 2019
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6. Classify each of the following statements as positive or
normative. Explain.
a. Society faces a short-run trade-off between inflation
and unemployment.
b. A reduction in the rate of money growth will
reduce the rate of inflation.
c. The Federal Reserve should reduce the rate of
money growth.
d. Society ought to require welfare recipients to look
for jobs.
e. Lower tax rates encourage more work and more
saving.

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Expert Answer

Step 1

Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and specify the other subparts (up to 3) you’d like answered.

Step 2

Positive statements are the facts or theories. These can be verified and amended with the reference of available evidences.

Normative statements are subjective based statements which are based on opinions and thinking rather than the evidences.

Step 3

a. Society faces a short-run trade-off between inflation and unemployment.

This statement is a positive statement. The reason is that there is a negative relationship between inflation and unemployment. If the inflation increases, unemployment will decrease. Hence, there is a trade-off between them.

b. A reduction in the rate of money growth will reduce the rate of inflation.

This statement is a positive statement. It can be proved by the empir...

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