Which of the Following Statements Has Both Positive and Normative

question 45

Multiple Choice

Which of the following statements has both positive and normative aspects to it?

• A)Reducing taxes on telecommunications will lower the price for consumers and encourage families to communicate with one another more frequently.
• B)Reducing the minimum wage will lead to lower unemployment and a lower average wage.
• C)Increasing taxes on gasoline will lead to lower fuel consumption and fewer automobiles being sold each year.
• D)Taxing alcohol leads to lower alcohol consumption per year.

---

Definitions:

Expected Inflation

The anticipated rate at which the general level of prices for goods and services will rise over a period of time.

Systematic Risk

The risk inherent to the entire market or market segment, often referred to as market risk.

Alpha

A measure of the active return on an investment, indicating how much a portfolio has outperformed or underperformed relative to a benchmark index.

Beta

An indicator of an investment's relative risk compared to the market, highlighting its sensitivity to market movements.