4. Which of the following statements are positive in nature and which are normative?

Question

a. A tax cut will raise interest rates.

I think it is Normative Economics

Answer 1

Read the text below and four statements regarding the text. Which of the statement is incorrect?

For a typical individual, the difference between income and expenditure is negative at the beginning and end of their lifespan, and positive in the middle.
A. If we look at the income and consumption stream, people should save for the future when they are working. B. The life cycle hypothesis predicts that people save less than they should do because of the action-intention gap. C. Automatic transfer from salary to saving account can be one way to save without much effort. D. Hyperbolic discounting suggests that people who planned to save at a specific time point are less likely to save as they approaches to that time point.

Answer 2

It’s positive