Which of the following statements is normative?

• A. Inflation rose by 2% last year.
• B. A decrease in taxes leads to higher consumer spending.
• C. The unemployment rate in the country is 5%.
• D. Government should increase the minimum wage to improve living standards.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the difference between positive and normative statements. Positive statements describe facts or cause-and-effect relationships and can be tested or validated. Normative statements express opinions or value judgments and cannot be tested empirically.
2. Step 2: Review each statement to classify it. For example, 'Inflation rose by 2% last year' is a positive statement because it reports a measurable fact.
3. Step 3: Identify statements that describe cause and effect, such as 'A decrease in taxes leads to higher consumer spending,' which is also positive because it can be tested.
4. Step 4: Recognize statements that report current data, like 'The unemployment rate in the country is 5%,' which is positive as it states a factual statistic.
5. Step 5: Spot the normative statement, which includes words like 'should' or expresses what ought to be done, such as 'Government should increase the minimum wage to improve living standards.' This is normative because it reflects a value judgment or policy recommendation.