Which of the Following Is a Normative Economic Statement

question 57

Multiple Choice

Which of the following is a normative economic statement?

• A)The price of wheat is too low.
• B)The current low price of wheat is the result of increased worldwide supply.
• C)When the price of wheat falls, the quantity of wheat purchased rises.
• D)When the price of wheat falls, the cost of wheat-based products falls.

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Definitions:

Favorable

A term used in finance and accounting indicating that actual performance is better than the expected or budgeted performance.

Unfavorable

A term used in budgeting and accounting to describe a financial condition or variance that is worse than expected or budgeted.

Revenue Variance

The difference between actual revenue earned and the budgeted or expected revenue.

Spending Variances

The difference between the actual amount of money spent and the budgeted amount for various cost items.