1.1.2 - Positive and Normative Economic Statements

Question 1

Explain positive statements

Answer 1

. The scientific or objective study of the subject

. Can be supported or refuted by evidence

. Concerned with finding out how economies and market actually work

e.g. the service will grow by 30 percent in size over the next 5 years

Question 2

Explain normative statements

Answer 2

. Are concerned with value judgements

. Opinions about how economies and markets should work

.Cannot be supported or refuted

e.g. The government should increase the state pension

Question 3

Role of value judgements in influencing economic decision making and policy

Answer 3

. Used to influence policy debates

. Used to find out how economies work

. Normative and positive statements can be used together to make a statement in a debate e.g :

‘the government should increases state pension’ [normative] because the average pensioner only has a disposable income of 40 per cent of the average worker’ [positive]