Which one of the following is a normative economic statement?

A) The unemployment rate fell for the fourth straight month, reflecting the effects from stronger economic growth in the second quarter.
B) The worsening balance of trade must be corrected if this nation is to remain competitive in the world economy.
C) Consumer prices are rising at a faster rate than in past months, indicating a renewal of inflationary pressures on the economy.
D) To help balance the Federal budget, Congress increased the tax on gasoline to its highest level in the past 10 years.

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matthew warmbrodt · Accepted Answer

Final Answer : B, Explanation :  Normative economic statements express judgments about what ought to be and are based on opinions or values. Choice B (The worsening balance of trade must be corrected if this nation is to remain competitive in the world economy.) is a normative statement because it suggests what should be done about the balance of trade, reflecting a value judgment. Choices A, C, and D describe factual situations and are considered positive economic statements, which can be tested and validated.

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