Normative reasoning
Inductive reasoning
Deductive reasoning
Positive reasoning
Correct answer is B
Inductive reasoning is a type of logical thinking that involves forming generalizations based on specific incidents you've experienced, observations you've made, or facts you know to be true or false.
A major disadvantage of a socialist economy is that
Corruption is rampant
Consumer's sovereignty is lost
Income inequality is entrenched
There is high level of unemployment
Correct answer is A
One of the major criticisms of socialism are that socialist countries have a tendency to develop too many layers of bureaucracy, which leads to corrupt practices. The government controls much of the economy's resource. They decides the whats, whens, and hows of production.
Structurally unemployed
Frictionally unemployed
Seasonally unemployed
Cyclically unemployed
Correct answer is B
Frictional unemployment happens when people move from one job to another. Mr X was frictionally unemployed for ten months.
A valid explanation for real wage growth is
An increase in the rate of productivity
The rising cost of capital accumulation
A contraction of emploment in service industries
An increase in the quantity of labour
Correct answer is A
Real wage growth is largely due to increased in economic activity creating competition between businesses to attract and retain workers. The higher the rate of economic activities (production, buying and selling) in the economy, the higher the real wage growth.
The rate of interest change on loans depends largely on
The prevailing exchange rate
Marginal efficiency of capital
The risk associated with the loan
The prevailing tax rate
Correct answer is A
Interest rates are determined, in large part by central banks who actively commit to maintaining a target interest rate. They do this by using the open market operations. To discourage borrowing, interest rates would be set high and set low to encourage lending. Therefore interest rates are determined mainly by the prevailing exchange rate.