Which of the Following Statements Is a Normative Statement

question 180

Multiple Choice

Which of the following statements is a normative statement?

• A) Inflation has been at an all-time low this year.
• B) The minimum wage should be increased to $8.50 per hour.
• C) Unemployment this month has increased by less than 0.5 percentage point..
• D) Additional spending on education has not produced any rise in test scores.
• E) Pepsi is less expensive than Coke this week.

---

Definitions:

Induced Consumption

Consumer spending that increases when income increases and decreases when income decreases.

Autonomous Consumption

Consumer spending that does not change in response to fluctuations in income, reflecting basic, non-discretionary expenditures.

Disposable Income

The funds set aside by households for spending and saving after income tax subtractions.

APC

Average Propensity to Consume, which refers to the percentage of income that an individual or group spends on consumer goods and services as opposed to saving.