Normative Economics Is

question 224

Multiple Choice

Normative economics is:

• A) usually incorrect.
• B) a statement of fact.
• C) the analysis of what is.
• D) the study of what ought to be.
• E) free of value judgments.

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Definitions:

Income

The money that an individual or business receives in exchange for providing a good or service or through investing capital.

Risk-neutral

Refers to individuals or entities that are indifferent between choices with varying levels of risk, focusing solely on the possible outcomes' expected values.

Risk-loving

A preference or inclination for taking on risks where the potential for gains outweighs the potential losses, as opposed to risk-aversion.

Risk-averse

describes an individual or entity that prefers to avoid risk and opts for the option with the least uncertainty.