Which of the Following Is a Normative Statement

question 62

Multiple Choice

Which of the following is a normative statement?

• A)Higher prices for cigarettes discourage people from buying cigarettes.
• B)The Federal Reserve should lower interest rates to help boost residential construction.
• C)High demand for cars drove up fuel prices.
• D)Government expenditure on public health and sanitation declined over the years.
• E)The U.S.experienced a high rate of unemployment in 2009.

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Definitions:

Keynesian Approach

An economic theory proposing that government intervention through fiscal policies (spending and taxes) can affect the overall level of economic activity, stabilizing the economy.

Fiscal Policy

Government strategies used to influence economic conditions through spending and taxation.

Budget Deficits

The situation where a government's expenditures exceed its revenues, leading to the accumulation of debt.

Demand-Side Economics

Macroeconomic policy that focuses on shifting the aggregate demand curve as a way of promoting full employment and price stability