The Important Characteristic of Normative Statements Is That They

question 60

Multiple Choice

The important characteristic of normative statements is that they

• A) explain what really exists.
• B) are based on somebody's values and cannot be tested.
• C) explain what normally happens in the real world.
• D) help guide us to what will normally occur if some economic variable changes its value.
• E) do not use the ceteris paribus assumption.

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Definitions:

Municipal Bonds

Debt securities issued by municipalities to finance public projects, such as building schools or highways, generally offering tax-exempt interest payments to investors.

Tax Advantage

Financial benefits that accrue due to preferential tax treatment of certain investments or transactions.

Corporate Bond

A type of debt security issued by corporations to raise capital, where the corporation promises to repay the principal along with interest at a specified future date.

Municipal Bond

A debt security issued by municipalities to finance public projects, such as roads and schools, typically offering tax-free interest payments to investors.