If the federal reserve raises interest rates

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Reference no: EM131240506

For each of the following statements, indicate whether they are positive, normative or both.

a. If the Federal Reserve raises interest rates, demand for housing is likely to fall.

Both a normative and a positive statement

Positive statement

Normative statement

Neither a normative nor a positive statement

b. The Federal Reserve should raise interest rates to keep inflation at an acceptably low level.

Both a normative and a positive statement

Normative statement

Positive statement

Neither a normative nor a positive statement

c. Stock prices are likely to fall over the next year as the economy slows.

Neither a normative nor a positive statement

Both a normative and a positive statement

Normative statement

Positive statement

d. A reduction in the capital gains tax (the tax on profits made in the stock market) would lead to a 10 to 20 percent increase in stock prices.

Normative statement

Neither a normative nor a positive statement

Both a normative and a positive statement

Positive statement

e. Congress should not reduce capital gains taxes without also providing tax breaks for lower-income people.

Normative statement

Positive statement

Neither a normative nor a positive statement

Both a normative and a positive statement

Reference no: EM131240506

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