One Way to Characterize the Difference Between Positive Statements and Normative

question 50

Multiple Choice

One way to characterize the difference between positive statements and normative statements is as follows:

• A)Positive statements tend to reflect optimism about the economy and its future,whereas normative statements tend to reflect pessimism about the economy and its future.
• B)Positive statements offer descriptions of the way things are,whereas normative statements offer opinions on how things ought to be.
• C)Positive statements involve advice on policy matters,whereas normative statements are supported by scientific theory and observation.
• D)Economists outside of government tend to make normative statements,whereas government-employed economists tend to make positive statements.

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Definitions:

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (or financial statements) is represented as a proportion of the total account.

Sales Returns

Goods returned by the customer to the seller for a refund or credit, reducing the total sales revenue.

Net Sales

Net sales refer to the amount of revenue generated from product sales after deducting returns, allowances for damaged goods, and discounts.

Vertical Analysis

A financial statement analysis method that lists each line item as a percentage of a base figure within the same statement.