The Difference Between a Positive Economic Statement and a Normative

question 87

Multiple Choice

The difference between a positive economic statement and a normative economic statement is that:

• A)a positive statement must be true,while a normative statement is often not true.
• B)a normative statement must be true,while a positive statement is often not true.
• C)a positive statement can be verified,while a normative statement cannot.
• D)a normative statement can be verified,while a positive statement cannot.
• E)a positive economic statement is a moral judgment,while a normative economic statement is not a moral judgment.

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Definitions:

Cash Inflows

Money received by a company from its various business activities, like sales, investments, and financing.

Initial Cost

Initial cost refers to the amount of money spent to acquire, or the cost associated with starting, an investment, project, or venture, including all necessary expenses to prepare the asset for its intended use.

Payback

The period of time required to recoup the funds expended in an investment, or how long it takes for an investment to reach a breakeven point.

Annual Cash Flows

The total cash that is generated and used by a business in one fiscal year.