Which Statement Is an Example of Normative Economics

question 138

Multiple Choice

Which statement is an example of normative economics?

• A) The Americans with Disabilities Act reduced employment opportunities for the disabled.
• B) Rent controls reduce the housing stock.
• C) Workers pay the majority of corporate taxes in the form of lower wages.
• D) The government should not have bailed out the domestic automobile market.

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Definitions:

Fixed Overhead Budget Variance

The difference between the fixed overhead costs that were budgeted and the actual fixed overhead costs incurred.

Fixed Manufacturing Overhead

Costs that remain constant regardless of the level of production or sales volume, such as salaries of supervisors and rent for factory premises.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain relatively constant regardless of the volume of production, including costs like factory rent, salaries of supervisors, and depreciation of factory equipment.

Direct Labor

The cost of wages for labor directly involved in the production of goods or services.