Which of the following is an example of normative statement?

CA Foundation · Business Economics · PYQS · January 2025
Which of the following is an example of normative statement?
(A) A. The demand for a good will increase if its price decreases.
(B) B. The government should increase taxes on liquor to reduce its consumption.
(C) C. A decrease in interest rates will lead to an increase in investment.
(D) D. An increase in government spending will reduce the unemployment rate.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. The government should increase taxes on liquor to reduce its consumption.

Topics: Theory of Demand and Supply

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