Which of the Following Is an Example of a Normative,as

question 33

Multiple Choice

Which of the following is an example of a normative,as opposed to positive,statement?

• A)If the price of a product decreases,people's willingness to buy that product will increase.
• B)Reducing tax rates on the wealthy would benefit the nation.
• C)If the national saving rate were to increase,so would the rate of economic growth.
• D)The elimination of trade restrictions would increase an economy's standard of living.

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Definitions:

Business-Specific Risk

The risk associated with the particular circumstances of a specific company, which can affect its earnings and thus its stock price.

Diversification

An investment strategy aimed at reducing risk by allocating investments among various financial assets, sectors, or industries.

Management Risk

The potential for losses due to the decisions and actions of an organization's management team.

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be mitigated through diversification and is often influenced by external factors like political, economic, and social changes.