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 ten years

Question

Quizplus · Accepted Answer

A normative economic statement is a statement that expresses a value judgment about whether a situation is desirable or undesirable. Option B expresses such a judgment by stating that the balance of trade must be corrected if the nation is to remain competitive in the world economy. The other options are all positive statements that describe actual economic conditions or actions taken, without necessarily evaluating their desirability.

Which One of the Following Is a Normative Economic Statement