Which of the Following Is an Example of a Normative

question 95

Multiple Choice

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

• A) Lower income tax rates will generate greater income tax revenue to the government.
• B) Income tax rates should be lower because that will increase government revenue.
• C) Lower income tax rates yield a larger federal government deficit.
• D) The federal budget deficit has increased every year for the last twenty years.

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Definitions:

Maintenance Expenses

Costs incurred to keep an asset in working condition or to maintain its operational efficiency.

Utilities

Services provided to the public, including electricity, gas, water, and sewage services, typically requiring payment.

Generates Revenues

Activities or assets within an organization that contribute to earning income from sales of goods or services.

Incurs Costs

To have expenses or to bear the expense of an action or operation.