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# Normative and positive statements

The current rate of unemployment of 5% is too high. This is an example of
a. normative statement
b. positive statement
c. the circular flow model
d. none of the above.

My answer is C because The circular-flow diagram represents the transactions in an economy by flows around a circle.

The primary difference between a change in demand and a change in the quantity demanded is
a. change in demand is a movement along the demand curve and a change in quantity demanded is a shift in the demand curve
b. change is quantity demanded is a movement along the demand curve and a change in demand is a shift in the demand curve
c. both a change in quantity demanded and a change in demand are shifts in the demand curve, only in different directions
d. both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions

If people demand more of product A when the price of B falls, then A nad B are
a. not related
b. substitutes
c. complements
d. Inferior.

My answer is I think I is D

#### Solution Preview

The first problem is intended to help you understand the difference between normative and positive statements. It doesn't involve circular flow, because none of the ramifications of unemployment are ...

#### Solution Summary

Normative and positive statements; a change in demand and a change in the quantity demanded.

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