Which of the following is an example of a normative

Question

Which of the following is an example of a normative - as opposed to a positive - statement?
A)The discount rate is the interest rate the Federal Reserve charges banks to borrow funds.
B)The US income tax rate increases with the amount of income earned.
C)The government should increase the tax on gasoline.
D)The US unemployment rate increased to 10 percent in 2009.

Quizplus · Accepted Answer

A normative statement expresses an opinion or recommendation about what ought to be done. Option C is a normative statement as it recommends that the government should increase the tax on gasoline. Option A is a positive statement as it simply states a fact. Option B is also a positive statement as it describes the relationship between income and tax rate. Option D is a positive statement as it describes the actual unemployment rate in 2009.