Which of the Following Is an Example of a Normative

question 13

Multiple Choice

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

• A)Interest rates rise when the government runs persistent budget deficits.
• B)Universal access to quality health care is the most important domestic policy issue of our time.
• C)Prices rise when the government prints too much money.
• D)Extending the time in which laid-off workers are eligible to receive government unemployment benefits has increased the unemployment rate.
• E)Lowering marginal income tax rates depresses consumer spending.

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Definitions:

Rate Variance

The difference between the actual rate paid for goods or services and the expected (or standard) rate, most often related to labor or materials.

Direct Labor-Hours

Sum of working hours of staff directly participating in the production process of an item.

Labor Rate Variance

This is the difference between the actual cost of labor and the budgeted or standard cost of labor used in manufacturing.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, used for allocating labor costs to products.