CMA Foundation · Fundamentals of Business Economics and Management · The Fundamentals of Economics
Which of the following statements is a normative economic statement?
The statement that the government should raise fertiliser subsidies is normative, because it expresses a value judgement about what ought to be done. The other options state facts or testable cause-and-effect relationships, which are positive statements.
- AIndia's retail inflation was 5% last year
- BThe government should raise subsidies on fertilisers to help small farmersCorrect
- CA rise in the price of petrol reduced its quantity demanded
- DUnemployment rose after the factory closed
Explanation
A normative statement expresses a value judgement about what ought to be. 'The government should raise subsidies' is an opinion on what should be done. The other statements describe facts or cause-effect relationships that can be tested, so they are positive.
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