1.1.2 Flashcards
What is a positive statement?
A statement which is objective and made without any obvious value judgments or emotions.
Can positive statements be tested?
Yes. They can be tested to be proven or disproven.
How are positive statements typically expressed?
In the form of a hypothesis that can be analysed and evaluated.
What is an example of a positive statement?
“Raising taxes will lead to an increase in tax revenue”
It can be tested to be true or false.
What is a normative statement?
A statement which is subjective and based on opinion.
Can normative statements be tested?
No. They cannot be proven or disproven.
What is an example of a normative statement?
“The free market is the best way to allocate resources”
Suggests one method is better than another, which cannot be tested.
What does a normative statement usually have?
Often includes words such as ought, should, maybe, unwise, should.
When do economists tend to use positive statements?
To back up normative statements.
How do value judgements influence economists?
Influence their decision making
