Positive economic statement versus normative economic statement
Explanation of Solution
Positive economics is an economic stream that puts an emphasis on defining, quantifying, and attempting to explain economic advancements, aspirations and related events. This is based on unbiased analysis of data, significant facts, and related estimates and tries to create cognitive connection that can assist in determining and evaluating the growth of economic principles. These statements are accurate, concise and clearly calculable and they can also be evaluated against substantial proof. Example of positive statement is, medical care provided by the government leads to increase in public expenditure. The statement here is based on facts and does not have an attached value judgment; this can be verified for its authenticity by researching about medical care that governments provide.
Normative economics concentrates more on moral judgments, political and view oriented declarations regarding "what should be" which is directed at investment programs,
Introduction:
The two classic branches of modern economics are positive economics and normative economics. Positive economics defines different economic concepts and explains them. These statements are facts that can be verified and on the other hand normative economics concentrates on the importance of economic equity, they are not facts, instead they're the views and thoughts of some economists who tell us what they believe.
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Principles of Economics (Second Edition)
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