1.1.2 Positive and Normative Economics

Question 1

Positive statement

Answer 1

A statement which is objective and made without any obvious value judgement or emotions.
•It can tested to be proven or disproven.

Question 2

Normative statement

Answer 2

A statement which is subjective and based on an opinion.
•It can’t be proven or disproven

Question 3

Role of value judgements in influencing economic decision-making

Answer 3

Economists use positive statements to back up normative statements.
• They can influence decision-making and policy