Which of the Following Is an Example of a Positive,as

question 3

Multiple Choice

Which of the following is an example of a positive,as opposed to normative,statement?

• A)When the minimum wage is increased,unemployment is a predictable consequence.
• B)The income tax rate should be increased to offset the budget deficit.
• C)Increasing government spending is the best way to help the economy move out of a recession.
• D)More than one of the above are positive statements.

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Definitions:

Nominal Sharpe Ratio

A measure of risk-adjusted performance that indicates the average return minus the risk-free return divided by the standard deviation of return on an investment.

Nominal Return

The amount of profit or loss on an investment before adjusting for inflation.

Real Return

The rate of return on an investment after adjusting for inflation, representing the actual purchasing power gained or lost.

Holding-period Return

The overall profit earned from owning an asset or a collection of assets for a certain duration, taking into account both earnings and growth in value.