Which of the Following Is an Example of a Normative

question 135

Multiple Choice

Which of the following is an example of a normative statement?

• A) The unemployment rate is six percent.
• B) There should be no unemployment in an advanced industrial society.
• C) Higher prices cause consumers to buy less.
• D) Equilibrium price implies that quantity demanded equals quantity supplied.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Payments

The transfer of money or its equivalent from one party to another as a fulfillment of an obligation or for the acquisition of goods or services.

Compounded Semiannually

Refers to the process of applying interest to a principal sum twice a year, resulting in an increase in the amount of interest earned or paid.

Semiannual

Occurring twice a year; pertaining to a period of six months.