Which of the Following Is an Example of a Normative

question 42

Multiple Choice

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

• A)If the price of a product decreases, quantity demanded increases.
• B)Reducing tax rates on the wealthy would be good for the country.
• C)If the national saving rate was to increase, so would the rate of economic growth.
• D)An increase in minimum wages will increase unemployment.

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Definitions:

Operating Expense

Operating expense includes all necessary expenditures that a business incurs as a result of performing its normal business operations, excluding the cost of goods sold.

Operating Profit

The profit earned from a firm's core business operations, excluding deductions of interest and taxes.

Mark-up

The amount added to the cost price of goods to cover overhead and profit.

Unit Cost

The cost incurred to produce, store, or acquire one unit of a product or service.