Which of the Following Most Clearly Distinguishes Between Positive and Normative

question 138

Multiple Choice

Which of the following most clearly distinguishes between positive and normative economics?

• A) Positive economics is the study of what ought to be; normative economics is concerned with the facts.
• B) Positive economics is the study of the facts; normative economics is concerned with what ought to be.
• C) Positive economics is the study of supply and demand in narrowly defined markets such as the market for shoes; normative economics focuses on highly aggregated markets such as the market for all consumer products.
• D) Positive economics is the study of goods that are scarce; normative economics is concerned with goods that are not scarce.

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Definitions:

Expenses

Costs incurred by a business in the process of earning revenue, often classified as operating or non-operating expenses.

Miscellaneous Expense

Small, often unpredictable expenditures that don't fit neatly into a designated budget category.

Post-Closing Trial Balance

A list of all the accounts and their balances after the closing entries are made, ensuring that debits equal credits in the ledger.

Dividends

Disbursements issued by a company to its shareholders, allocating a fraction of the company's profits.