The correct answer is: A. a-3, b-2, c-4, d-1
Positive economics is concerned with “what is” and seeks to explain economic phenomena without making value judgments. Normative economics is concerned with “what ought to be” and makes value judgments about economic policies. Microeconomics is the study of the economic behavior of individual units, such as households and firms. Macroeconomics is the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.
Here is a brief explanation of each option:
- a. “What is”
Positive economics is concerned with “what is” and seeks to explain economic phenomena without making value judgments. For example, a positive economic statement might be “The unemployment rate in the United States is 5%.” This statement is simply a description of the current state of the economy, and it does not make any judgment about whether or not the unemployment rate is good or bad.
- b. “What ought to be”
Normative economics is concerned with “what ought to be” and makes value judgments about economic policies. For example, a normative economic statement might be “The government should increase the minimum wage.” This statement is a value judgment about what the government should do, and it is not based on any objective facts.
- c. Aggregates
Aggregates are totals of economic variables, such as the total amount of goods and services produced in an economy or the total amount of money in circulation. Aggregates are often used in macroeconomic analysis, which is the study of the economy as a whole.
- d. Individual units
Individual units are the basic units of economic analysis, such as households and firms. Individual units are often studied in microeconomics, which is the study of the economic behavior of individual units.