Which of the Following Is a Normative Statement

question 314

Multiple Choice

Which of the following is a normative statement?

• A) The Gross Domestic Product is the dollar value of all goods and services produced in a country in a year.
• B) Fiscal policy is determined by the Congress and the president.
• C) Tax cuts ought to be enacted for the good of the economy.
• D) Monetary policy is determined by the Federal Reserve System.

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Definitions:

Fixed Cost

Costs that do not change with the level of output or activity in the short term, such as rent, insurance, and salaries of permanent staff.

Product

Any good, service, or idea that can be offered to a market to satisfy a want or need.

Contribution Approach

An income statement format that organizes costs by their behavior. Costs are separated into variable and fixed categories rather than being separated into product and period costs for external reporting purposes.

External Reporting

The process of preparing and disclosing financial statements and other reports to entities outside of the corporation, such as investors and regulatory bodies.