[Solved] Which phrase typically indicates a normative economic statement? — Ans: 'The government should increase subsidies for farmers.' | Economic Awareness

Economic Awareness - Sectors of Indian Economy

Which phrase typically indicates a normative economic statement?

A'What is the current GDP growth rate?'

B'The government should increase subsidies for farmers.'

C'The unemployment rate rose by 1% last quarter.'

D'Inflation is measured by the Consumer Price Index.'

Step-by-Step Solution

Step 1: Understand key indicators of normative statements
Normative economics involves value judgments and often uses words like 'should', 'ought to', or 'must'.
Step 2: Identify the phrase with value judgment
Only the statement about increasing subsidies uses 'should', indicating a prescriptive opinion.
Final Answer:
The government should increase subsidies for farmers. → Option B
Quick Check:
Normative economics = prescriptive statement ✅

Quick Trick: Spot words like 'should' or 'must' to identify normative statements.

Common Mistakes:

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