Income inequality can be high in the free market and should be reduced This is an example of What ?
Correct answer: D. Normative economic statement
- A. Judicial economic statement
- B. Positive economic statement
- C. Formative economic statement
- D. Normative economic statement
Explanation
The claim that inequality should be reduced expresses a value judgment about what ought to happen, making it a normative statement. Positive statements describe testable facts without prescribing policy.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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