1.1.2 Positive and Normative statements

Question 1

Positive statement

Answer 1

A statement which is objective and made without any obvious value judgments or emotions. They can be proven or disproven.

Question 2

Give an example of a positive statement

Answer 2

“Raising taxes will lead to an increase in tax revenue”

Question 3

Normative statement

Answer 3

A statement which is subjective and based on opinion so cannot be proven or disproven. Often includes words such as ought, should, unwise, maybe or says one action is better than another.

Question 4

Give examples of normative statements

Answer 4

“The free market is the best way to allocate resources”
“The government should increase taxes”

Question 5

The role of value judgments

Answer 5

Economists tend to use positive statements to back up normative statements.