Which of the Following Is an Example of a Normative

question 111

Multiple Choice

Which of the following is an example of a normative statement?

• A) Households should save more.
• B) Household consumption is the largest component of spending.
• C) Government spending rose in the 1990s.
• D) The business sector is the primary source of jobs.

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Definitions:

Returns

Returns are the profits or losses generated from an investment over a specified period, often expressed as a percentage of the initial investment amount.

Risk

The possibility of loss or another adverse outcome resulting from a particular action or event.

Negatively Skewed Distribution

A probability distribution that is skewed to the left, indicating that the tail on the left side of the probability density function is longer or fatter than the right side.

Negative Correlation Coefficient

A statistical measure indicating that as one variable increases, the other variable tends to decrease.