Which of the following is an example of a normative economic statement?
A) Universal access to quality health insurance is the most important domestic policy issue of our time.
B) Extending the time in which laid-off workers are eligible to receive government unemployment compensation has increased the unemployment rate.
C) Lowering marginal income tax rates depresses consumer spending.
D) Prices rise when the government prints too much money.
E) Interest rates rise when the government runs persistent budget deficits.

Question

Quizplus · Accepted Answer

A normative economic statement expresses an opinion or value judgment and cannot be proven true or false. Option A expresses a value judgment by stating that access to quality health insurance should be a top priority for domestic policy.

The other options are all positive economic statements, which can be proven true or false based on empirical evidence. Option B suggests a causal relationship between an extension in unemployment benefits and an increase in unemployment, which could be tested with data. Option C suggests a relationship between changes in tax rates and consumer spending. Option D suggests that inflation can result from excessive money printing, which is a widely recognized economic principle. Option E suggests a relationship between fiscal policy and interest rates.

Which of the Following Is an Example of a Normative