Which of the Following Is an Example of a Normative

question 14

Multiple Choice

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

• A) The inflation rate in the United States decreased from 4 percent last year to 3 percent this year as a result of lower energy prices.
• B) The economy grew at an annual rate of 5 percent during the first quarter of this year.
• C) If two automobile companies merge, it is likely that the price of automobiles will rise.
• D) An increase in international trade benefits some workers but hurts others.
• E) The minimum wage should be increased so that low income workers can afford to keep up with the cost of living.

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Definitions:

Obligee

The party in a contractual agreement who is owed a duty or obligation by another party, the obligor.

Third-Party Donee Beneficiary

A person who benefits from a contract between two other parties, although they are not one of the contract's signatories.

Insurance Policy

A contract between an individual or entity and an insurance company, outlining the terms for premium payment in exchange for risk coverage.

Assignment

The process of handing over rights, assets, or responsibilities from one entity to another.