Which of the Following Is a Normative Statement

question 188

Multiple Choice

Which of the following is a normative statement?

• A) A decrease in price leads to an increase in quantity consumed.
• B) Incomes grow more rapidly in high-tax states than low-tax states.
• C) People would be better off if government expenditures were higher.
• D) People will buy less butter at $1.50 per pound than they will at $1 per pound.

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Definitions:

Compounded Quarterly

A method where interest is added to the principal amount of an investment or loan at the end of every three months, leading to interest earning interest.

Deferred Annuity

A financial product that delays payments of income, installments, or a series of payments until a specified future date.

Ordinary Annuity

A sequence of identical disbursements done at consecutive period ends over a predefined duration.

Perpetuity

A type of annuity that generates an infinite series of future payments, theoretically lasting forever.