Which of the Following Is an Example of a Normative

question 86

Multiple Choice

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

• A) A cut in the tax rate will lead to an increase in consumption.
• B) Relaxation of import duties will encourage imports.
• C) An increase in subsidies to farmers will boost agricultural production.
• D) An increase in social security benefits will increase the welfare of all economic agents.

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Definitions:

Work In Process

Represents the inventory that has begun the production process but is not yet completed in a manufacturing company.

Equivalent Units

A concept used in cost accounting to express the amount of materials or labor that has been transformed into completed units during a period.

Direct Materials

The raw materials that are directly incorporated into a finished product, which are easily traceable and assignable to the manufacturing cost.

Conversion Costs

The total cost of converting raw material into finished goods, typically comprising direct labor and manufacturing overhead costs.