Which of the Following Is an Example of a Normative

question 69

Multiple Choice

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

• A) The American Recovery and Reinvestment Act should not have been passed during the Great Recession.
• B) Unemployment soared to 25 percent during the Great Depression.
• C) An increase in alcohol taxes will reduce the number of drunk driving accidents.
• D) Great Britain has fewer hospital beds per capita today than they did in 1948.

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Definitions:

Interest Rates

The rate at which a lender charges a borrower for asset usage, calculated as a percentage of the principal sum.

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.

Financial Asset

Assets that derive value from a contractual claim, such as stocks, bonds, bank deposits, and other investments.

Future Cash Flows

Future cash flows refer to the estimated amount of money that is expected to be received or paid out by a company in future periods.