One Thing That Distinguishes Normative Economic Principles from Positive Economic

question 36

Multiple Choice

One thing that distinguishes normative economic principles from positive economic principles is that:

• A)normative principles are pessimistic and positive principles are optimistic.
• B)normative principles reflect social norms, and positive principles reflect universal truths.
• C)normative principles tell us how people should behave, and positive principles tell us how people will behave.
• D)normative principles tell us how people will behave, and positive principles tell us how people should behave.

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Definitions:

Loanable Funds

The resources available for borrowing, which consist of household savings and income that banks and other financial institutions can lend to borrowers.

Retirement Savings

Funds set aside during an individual's working years, intended to support them financially during retirement.

Loanable Funds

The market model where the supply of loans available from lenders meets the demand for loans from borrowers.

Medical Needs

The requirements necessary for maintaining or improving health, including medications, treatments, and medical services.