Distinguishing Normative from Positive Statements

Steps:

• Define normative statements as opinions on what should be, versus positive statements as factual descriptions.
• Examine each option for prescriptive language indicating judgment or policy recommendation.
• Identify the option that expresses a "should" or value-based view rather than observed relationships.
• Confirm by ruling out descriptive economic predictions or correlations.

Why D is correct:

• Normative statements prescribe actions or policies, and D uses "should be reduced" to advocate for a specific interest rate change based on desirability.

Why the others are wrong:

• A describes a likely factual outcome (positive prediction).
• B states an incorrect factual prediction about consumption (positive but wrong).
• C observes a general empirical relationship (positive correlation statement).

Final answer: D