Question

Inflation occurs when there is a temporary increase in the retail price of gasoline just before a long holiday weekend.

True

False

The four phases of the business cycle are, in order: the peak, the downturn, the trough, and the upturn.

True

False

Deciding what the distribution of income should be is an example of positive economics.

True

False

Social and political forces affect the way in which the "invisible hand" works.

True

False

Answer 1

Answer 1 = false

Reason = when there is price rise in only one product , then we cannot say it as inflation . Therefore a temporary rise in the price of gasoline does not result in inflation

Answer 2 = True

Reason = four phases of business cycle are namely-

• Expansion or upturn
• Contraction or downturn
• Peak
• Trough

Answer 3 = False

Reason = deciding what the distribution of income should be is an example of Normative Economics and not positive Economics because Normative Economics deals with "what ought to be" or what should be" while positive Economics deals with " what actually is" .Here in the statement "should" word is mentioned which means the statement resembles Normative Economics.

Answer 4 - True

Reason = Invisible hands also describes the social benefit and political benefits overall of self constructed action of an individual or society. Hence social and political forces affects the way individual hands work

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