A Normative Statement

question 158

Multiple Choice

A normative statement

• A) depends on someone's values.
• B) cannot use the word "should."
• C) says what is currently believed about the way the world operates.
• D) must be tested to determine if it is correct.
• E) can be tested to determine if it is correct.

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Definitions:

Rational Expectations

A theory suggesting that individuals form future expectations based on all available information, including predictions about monetary and fiscal policies.

Monetary

Relating to money or currency, especially the management of money supply and interest rates by a government.

Supply-Side

Economic policies or conditions focused on increasing the supply of goods and services, typically involving tax cuts or incentives for producers.

New Classical Economists

Economists who advocate for the theory that markets are clear and that economic players always make rational decisions based on available information.