The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of:
A) A normative economic statement
B) A positive economic statement
C) Microeconomic analysis
D) Rational self-interest

Question

Quizplus · Accepted Answer

The statement is a positive economic statement as it simply reports an observed fact about the rise in consumer prices and predicts the potential rate of inflation based on that trend. It is not making a value judgment or prescribing a course of action, which would make it a normative economic statement. The statement also does not relate to specific individual behavior or decisions, ruling out microeconomic analysis and rational self-interest as possible choices.

The Statement in a Newspaper That "Consumer Prices Rose Last