Which One of the Following Is a Normative Economic Statement

question 27

Multiple Choice

Which one of the following is a normative economic statement?

• A) The unemployment rate fell for the fourth straight month, reflecting the effects from stronger economic growth in the second quarter
• B) The worsening balance of trade must be corrected if this nation is to remain competitive in the world economy
• C) Consumer prices are rising at a faster rate than in past months, indicating a renewal of inflationary pressures on the economy
• D) To help balance the Federal budget, Congress increased the tax on gasoline to its highest level in the past ten years

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Definitions:

Reference Prices

The prices that consumers consider reasonable and fair for a product.

Break-Even Point

The point at which the costs of producing a product equal the revenue made from selling the product.

Variable Costs

Costs that vary depending on the number of units produced or sold.

Units Produced

Units Produced refers to the total number of units of a product that are manufactured during a specific period.