Which of the Following Is an Example of a Normative

question 143

Multiple Choice

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

• A) Incomes increase when national production increases.
• B) Women should earn the same income as men.
• C) When the price of a good rises, people will buy more of it.
• D) The more time you spend studying, the higher your economics test scores will be.
• E) The price and the quantity demanded of a good are negatively related.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of a business, whichever is longer.

Current Ratio

A financial metric that compares a company's current assets to its current liabilities, indicating liquidity levels.

Equity (Leverage)

The amount of funds contributed by owners (shareholders) plus the retained earnings (or losses). It can also refer to the use of debt to acquire additional assets.

Borrowed Money

Funds that an individual or entity obtains from another party under the condition of future repayment with interest, which can be used for various purposes.