CA Foundation · Business Economics · Nature and Scope of Business Economics
Which of the following is a normative statement in economics?
The statement that the government should reduce GST on handloom products is normative. It expresses an opinion about what ought to be done and cannot be proved true or false by facts alone, whereas the other options state verifiable facts or testable relationships.
- AIndia's retail inflation was lower this year than last year.
- BA rise in the price of petrol reduces the quantity of petrol demanded.
- CThe government should reduce GST on handloom products to help weavers.Correct
- DWheat production in Punjab increased by 4% last year.
Explanation
A normative statement expresses a value judgement about what ought to be done, and the word 'should' signals this. The other options describe facts or cause-and-effect relationships that can be tested against data, so they are positive statements.
Did you get it right without looking?
One question tells you little. A timed set on Nature and Scope of Business Economics shows your real accuracy, how long you take and where you lose marks.
More Nature and Scope of Business Economics questions
- Ananya Textiles in Surat is deciding whether to use its own warehouse, which could otherwise be rented out for ₹40,000 per month, to store r…
- Rajesh Kumar, an economist studying the Indian automobile sector, wants to understand why two firms manufacturing similar cars at the same l…
- Sharma Textiles earns ₹12,00,000 in total revenue. Its explicit costs are ₹8,00,000. The owner, Mr. Sharma, could have earned a salary of ₹2…
- A firm is considering a new product line. Which of the following uses the incremental principle correctly in deciding?
- Rajesh Manufacturing Ltd., a Delhi-based textile firm, is deciding whether to expand its production capacity. The firm estimates that expans…
- During inflationary periods in India, business managers often struggle to distinguish between nominal profit increases and real profit growt…