Which of the Following Is an Example of a Normative,as

question 33

Multiple Choice

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

• A)If the price of a product decreases,people's willingness to buy that product will increase.
• B)Reducing tax rates on the wealthy would benefit the nation.
• C)If the national saving rate were to increase,so would the rate of economic growth.
• D)The elimination of trade restrictions would increase an economy's standard of living.

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Definitions:

Sales

Revenue generated from the selling of goods or services within a specific period.

Equity Multiplier

A financial leverage ratio that measures the proportion of a company's assets that are financed by shareholder's equity.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest obligations, calculated as earnings before interest and taxes (EBIT) divided by interest expenses.

Interest Expense

The cost incurred by an entity for borrowed funds, reflected in its income statement.