Suppose two economists are arguing about policies that deal with unemployment. One economist says. The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars the other economist responds Nonsense and poppycock! If the government spent an additional 50 billion dollars it would reduce unemployment by only one tenth of one percent. and that effect would only be temporary! These economists ?
Correct answer: B. Disagree because they have different scientific judgments
- A. None of these answers
- B. Disagree because they have different scientific judgments
- C. really don't disagree at all. It just appears that they disagree
- D. disagree because they have different values
Explanation
Their claims concern the size and duration of the effect of government spending, which are matters of empirical economic analysis. They therefore differ in scientific judgments, not in values.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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