Which of the following statements is normative?

A. A large budget surplus is likely to lower interest rates.
B. High taxes tend to decrease saving.
C. When the Federal Reserve increases the money supply, interest rates decrease.
D. Large budget deficits should be avoided.


Answer: D

Economics

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In the United States, taxpayers are allowed to exclude from taxation a certain amount of income, called

A) the personal income exclusion. B) the personal exemption. C) the income tax credit. D) the income allowance.

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If a nation has a comparative disadvantage in the production of some commodity, a. it can gain from international trade in that commodity only if it has an absolute advantage in that commodity. b. it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if they produced it domestically. c. it cannot gain from international trade in the

commodity. d. it cannot gain from international trade unless it has an absolute advantage in every other commodity.

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Exchange rates determined by the forces of demand and supply are called

a. fixed exchange rates. b. floating exchange rates. c. equilibrium exchange rates. d. dirty exchange rates.

Economics

In order to increase productivity and economic growth, poor nations need

A. A large military. B. Increased consumption. C. A strong dictator. D. Increased capital investment.

Economics