One Way to Characterize the Difference Between Positive Statements and Normative

question 50

Multiple Choice

One way to characterize the difference between positive statements and normative statements is as follows:

• A)Positive statements tend to reflect optimism about the economy and its future,whereas normative statements tend to reflect pessimism about the economy and its future.
• B)Positive statements offer descriptions of the way things are,whereas normative statements offer opinions on how things ought to be.
• C)Positive statements involve advice on policy matters,whereas normative statements are supported by scientific theory and observation.
• D)Economists outside of government tend to make normative statements,whereas government-employed economists tend to make positive statements.

---

Definitions:

Financial Asset

Any asset that is cash, an ownership interest in an entity, or a contractual right to receive or deliver cash or another financial instrument.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically involving periodic interest payments and the return of the principal at maturity.

Life Insurance Reserves

Funds that life insurance companies are required to set aside to ensure they can meet future obligations to policyholders.

Pension Reserves

Funds set aside by an organization to meet future pension liabilities for its employees.