Introduction to Business EconomicsMTP Aug 18Question 644 of 209
All Questions

Which of the following statements would you consider to be a normative one?

Options

AFaster economic growth should result if an economy has a higher level of investment.
BChanging the level of interest rates is a better way of managing the economy than using taxation and government expenditure.
CHigher levels of unemployment will lead to higher levels of inflation.
DThe average level of growth in the economy was faster in the 1990s than the 1980s
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Correct Answer

✅ Option b — Changing the level of interest rates is a better way of managing the economy than using taxation and government expenditure.

All Options:

  • AFaster economic growth should result if an economy has a higher level of investment.
  • BChanging the level of interest rates is a better way of managing the economy than using taxation and government expenditure.
  • CHigher levels of unemployment will lead to higher levels of inflation.
  • DThe average level of growth in the economy was faster in the 1990s than the 1980s

About This Chapter: Introduction to Business Economics

Paper

Paper 4: Business Economics

Weightage

5%

Key Topics

Meaning, Scope, Price Mechanism

This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.

View Official ICAI Syllabus

Exam Strategy Tip

Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.

Related Comparison Tables

Microeconomics vs Macroeconomics: The Complete CA Foundation GuidePositive vs Normative Economics: Fact vs Opinion

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