Which of the Following Is an Example of a Normative

question 173

Multiple Choice

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

• A) If the money supply falls, interest rates will rise.
• B) Teenage unemployment would be lower if there were no minimum wage.
• C) The quantity of shirts sold increases as the price of shirts decreases.
• D) The federal government's total spending should be reduced.
• E) If interest rates go up, then fewer buildings will be constructed.

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Definitions:

Work in Process Inventory

Goods that are in various stages of the production process but are not yet completed products.

Raw Materials Inventory

The stock of basic materials and components required to manufacture products.

Finished Goods Inventory

Goods that are fully manufactured but have not been purchased or sent out to buyers.

Cost of Goods Manufactured

The total cost of producing goods during a specific period, including costs associated with materials, labor, and overhead.