positive & Normative Statements

Question 1

What are positive statements?

Answer 1

• based on empirical evidence can be proven to be true or false

Question 2

examples of positive statements

Answer 2

• The UK unemployment rate has fallen from 4% to 3.7% in the past three months
• Increasing the minimum wage last year in the UK resulted in improvements to wage inequality
• Prices in the UK have risen dramatically, partly due to the 20% increase in the price of oil

Question 3

What are normative statements?

Answer 3

• focuses on value judgements.
• These judgements are built around opinions and beliefs as to what the best economic policies or solutions may be

Question 4

Examples of normative statements

Answer 4

• Every economy should aim to provide free healthcare for its citizens
• Corporation taxes in an economy should be higher than personal income taxes
• The best way to deal with a rise in crime is to employ more police

Question 5

How do valued judgements influence individuals?

Answer 5

• can influence decisions which can be related to any part of their lives, from what they eat, to where they work, to how they maintain their health
• For example, deciding not to eat meat is often a value judgement based around unethical methods of food production.

Question 6

How do value judgements, influence governments choices?

Answer 6

• influences in regards to the economic policies they choose to adopt and spend money on
  eg
  The USA spends more money on imprisoning drug users than rehabilitating them
  In the UK, the Government has recently increased its spending on rehabilitation