1.1.2 Positive and Normative Statements

Question 1

What is the definition of Positive Statements?

Answer 1

Objective statements based on evidence or facts which can, therefore, be proved or disproved

Question 2

What are words used in a Positive Statement?

Answer 2

• Will

- Is

Question 3

Example of what Positive Statements may be based on

Answer 3

• Gross Domestic Product (GDP)
• Prices of commodities
• The rate of unemployment
• The exchange rate of one currency against another

Question 4

What is the definition of Normative Statements?

Answer 4

Subjective statements based on value judgements and cannot be proved or disproved

Question 5

What are words used in a Normative Statement?

Answer 5

• Should

Question 6

What are Normative statements usually associated with?

Answer 6

Discussions about economic policy

Question 7

Example of what Normative Statements may be based on

Answer 7

• A minimum price for alcohol
• Subsidies for green energy
• An increase in the tax on cigs

Question 8

Value Judgements

Answer 8

Influence economic decision making and policy because different economists may make different judgements from the same statistic.