Which of the Following Is an Example of a Normative

question 36

Multiple Choice

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

• A)A higher price for a good causes people to want to buy less of that good.
• B)A lower price for a good causes people to want to buy more of that good.
• C)To make the good available to more people, a lower price should be set.
• D)If you decrease the amount of sugar in soda drinks, sales to children will decrease.

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Definitions:

Financial Statements

Reports that summarize the financial performance and financial position of a business, including the balance sheet, income statement, and cash flow statement.

Impaired Asset

An asset that has a market value significantly below its carrying amount on the balance sheet, indicating that recoverable amount is less than its book value, necessitating a write-down.

Depreciation Expense

The monetary value reduction in an asset's cost over its useful life due to wear and tear, age, or obsolescence.

Book Value

The net value of an asset according to its balance sheet account balance, calculated as the original cost minus accumulated depreciation.