Which one of the following is a normative economic statement?
A) The unemployment rate fell for the fourth straight month, reflecting the effects from stronger economic growth in the second quarter.
B) The worsening balance of trade must be corrected if this nation is to remain competitive in the world economy.
C) Consumer prices are rising at a faster rate than in past months, indicating a renewal of inflationary pressures on the economy.
D) To help balance the Federal budget, Congress increased the tax on gasoline to its highest level in the past 10 years.

Question

Quizplus · Accepted Answer

A normative statement is one that involves value judgments or prescriptions about what ought to be. Option B makes a value judgment about the balance of trade, stating that it must be corrected in order for the country to remain competitive in the world economy. The other options are descriptive statements that simply report facts or events.

Which One of the Following Is a Normative Economic Statement