Which of the Following Is an Example of a Normative

question 14

Multiple Choice

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

• A) The inflation rate in the United States decreased from 4 percent last year to 3 percent this year as a result of lower energy prices.
• B) The economy grew at an annual rate of 5 percent during the first quarter of this year.
• C) If two automobile companies merge, it is likely that the price of automobiles will rise.
• D) An increase in international trade benefits some workers but hurts others.
• E) The minimum wage should be increased so that low income workers can afford to keep up with the cost of living.

---

Definitions:

Economic Boom

A period marked by significant, sustained growth in a country's economy, characterized by increased productivity, sales, and income.

Controlling Costs

The practice of managing and regulating expenses to operate within a budget and maximize profitability.

Employee Benefits

Non-wage compensations provided to employees in addition to their normal salaries or wages, such as health insurance, retirement plans, and paid vacation.

Labor Market

A marketplace where employers find employees and vice versa, involving the supply and demand for labor.