Postive And Normative Economic Statements

Question 1

What are positive economic statements

Answer 1

Positive economic statements are objective statements based on evidence or facts that can, therefore, be proved or disproved.

Question 2

What are normative economic statements?

Answer 2

Normative economic statements are subjective statements based on value judgements and cannot be proved or disproved.

Question 3

What are the role of value judgments in influencing economic decisions?

Answer 3

the economic policies promoted by economists are likely to be heavily influenced by their values and politics. For example, if a government wanted to reduce its budget deficit, a left-wing economist might favour wealth taxes or higher taxes on those with high incomes. In contrast a right-wing economist might prefer cuts in welfare benefits to the unemployed.