Which of the Following Is an Example of a Normative

question 45

Multiple Choice

Which of the following is an example of a normative - as opposed to a positive - statement?

• A)The discount rate is the interest rate the Federal Reserve charges banks to borrow funds.
• B)The US income tax rate increases with the amount of income earned.
• C)The government should increase the tax on gasoline.
• D)The US unemployment rate increased to 10 percent in 2009.

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Definitions:

Revenue

The overall income produced from selling goods or services that are central to a company's main business activities.

Profit and Loss

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, usually a fiscal quarter or year.

Comparative Purposes

For purposes of comparison, often to analyze differences or similarities between two or more items or situations.

External Data

Information that originates outside the organization and is used for analysis or decision making.