Which of the following is an example of a normative economic statement?
A) If the money supply falls, interest rates will rise.
B) Teenage unemployment would be lower if there were no minimum wage.
C) The quantity of shirts sold increases as the price of shirts decreases.
D) The federal government's total spending should be reduced.
E) If interest rates go up, then fewer buildings will be constructed.

Question

Quizplus · Accepted Answer

Normative statements are statements that express opinions or value judgments. In this case, the statement "The federal government's total spending should be reduced" is an expression of value judgment and is therefore a normative economic statement. The other choices are positive economic statements that describe cause-and-effect relationships between economic variables, rather than expressing opinions or value judgments.

Which of the Following Is an Example of a Normative