Which of the Following Is a Normative Macroeconomic Statement

question 104

Multiple Choice

Which of the following is a normative macroeconomic statement?

• A) An increase in government spending will reduce unemployment.
• B) An active government policy should be employed to maintain a healthy economy.
• C) The unemployment rate is 10 percent.
• D) There is a positive relationship between inflation and the rate of growth of money
• E) Gross domestic product grew 3 percent this year.

---

Definitions:

Inflation Expectations

The rate at which people expect the general price level of goods and services to rise in the future.

Housing and Financial Crisis

A period marked by severe disruptions in the availability of credit, widespread foreclosures, and plummeting housing prices, typically leading to a long-term economic downturn.

World Prices

The prices of goods and services as determined on the global market, influenced by global supply and demand.

Inflation Rate

The velocity with which the average cost figures for goods and services ramp up, undercutting the efficiency of consumer expenditure.