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Positive vs. Normative Economics: What’s the Difference?

Negative and positive economics comprise the two traditional branches of economics in the modern age. Positive Economics provides a description and explanation of the various economic phenomenon While normal economics concentrates on the significance of fairness in economics or what the economics ought to be.which of the following is an example of a positive economic statement?

Simply put positive economics is”the “what is” part of economics. The normative economy on the other hand is regarded as the part of economics which tries to establish the viability of various economic programs and conditions by asking questions about what “should” as well as is “ought” should be.

Positive Economic

Positive economics is a branch of economics that concentrates on the definition, quantification, and analysis of economic trends as well as expectations and related issues. It is based on objective data analysis, relevant facts and related figures. It tries to establish causes-and-effect or behavioral relationships that can aid in determining and verify the development theory of the economy. 1

Positive economics is based on facts and objective in which the claims are clear and descriptive. They are also clearly measured. These statements can be compared against concrete evidence or historical examples. There aren’t any instances of disapproval or approval in economics that are positive.

Below is an instance of an economic statement that is positive: “Government-provided healthcare increases public spending.” The statement is based on facts and doesn’t have any judgment of value associated with it. The validity of this statement can be demonstrated (or not be disproved) through a study of the healthcare expenditure when governments offer healthcare.

Economic Normative

Normal economics is focused on value-based judgements that are aimed towards enhancing economic development, investment plans as well as how wealth is distributed. Its purpose is to analyze the merits (or the lack of) of various economic trends or programs, as well as situations by asking questions about what is needed to be done or what the outcome should be.

The normative economy is a subjective, value-based field coming from personal views or views that are part of taking decisions. The arguments of this kind of economics are strict and prescriptive. They are often based on political principles so this particular branch of economics is known as “what ought to become” or “what should become” economics.

A good example of a standard economic statement is: “The government should provide the basic health care to all citizens.” From the above statement, it’s valued, rooted in a the individual’s perspective, and meets the requirements that defines what “should” be.

Special Beacons

Discussions about public policies usually include normative economic statements. More disagreement can be found in these discussions due to the fact that neither side can be able to prove their claims with certainty.which of the following is an example of a positive economic statement?

Although normative statements are generally formulated and subjective in their nature they are essential channels to encourage out of the box thinking. These opinions could form the basis for any needed modifications that be able to transform a specific project.

However, it is not the sole source of decision-making on major economic issues. Positive economics is the objective perspective that focuses on data and cause-and-effect. Together with positive economics normative economics could be beneficial in the development, generation and implementing new concepts and theories to meet various economic goals and perspectives.

An knowledge of the distinction between normative and positive economics can result in better policy making when policies are from a balance of data (positive economics) as well as opinions (normative economics). However, many policies on topics ranging between the international economy and social welfare are at the very least founded upon normative economics.

What is an example of normative Economics?

Any economic policy that promotes any kind of policy or social agenda could be termed normative. For example, advocating for an increase in minimum wages to benefit workers is an instance an argument considered to be normative because the assertion is founded on subjective opinions. But, a claim that higher minimum wage would increase GDP could be considered positive economics.

What is a Positive Theory statement?

Positive statements are those which has the potential to establish hypotheses that can be tested empirically. Contrary to that, a normative statement is made based on opinions or subjective values.

Is Positive Economics Better Than Normative Economics?

Both kinds have their places however, each contain flaws. Combining normative and positive economic statements is usually needed to develop the economic policies of a country or region, industrial sector, institution or business.

James Anderson
James Anderson
I am content writer. I write content about tech gadgets, tech news, tech invention, computer software and hardware sollution as well as smartphones problem I have a youtube channel also and work as video editor.

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