IAI Actuarial Core Principles · Business Economics · Relationship between economics and business
Which of the following is a normative statement rather than a positive statement?
The statement that the RBI should prioritise growth over inflation control is normative because it expresses a value judgement about what ought to be done. The other statements describe facts or cause-effect claims that can be tested against evidence.
- AIndia's CPI inflation rose last year
- BA rise in the repo rate usually reduces demand for home loans
- CThe RBI should prioritise growth over inflation controlCorrect
- DInsurance penetration in India is lower than the global average
- Unemployment is higher among young graduates than older workers
Explanation
A normative statement expresses a value judgement about what ought to be. 'Should prioritise' is such a judgement. The others can be tested against data, even if some may be false.
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