Positive and Normative Economic Statements (1.1.2)

Question 1

What is a Positive Statement?

Answer 1

Fact/objective statements -Describe the world as it is without making any judgements. Based on facts and can be proven or disproven.

Question 2

What are examples of Positive Statements?

Answer 2

E.g. Data, Facts, Evidence

Question 3

What is a Normative Statement?

Answer 3

Opinion- Make a value Judgement about what ought to be or should be. They are based on personal beliefs, values rather than objective facts.

Question 4

What are examples of Normative Statements?

Answer 4

E.g. Opinion, Personal Perspectives

Question 5

Inflation rose from 10% from July 2021 to July 2022
Positive or Normative Statement?

Answer 5

Positive as it can be tested

Question 6

Increasing Interest Rates by 1% will reduce inflation by 2% in the next 12 months
Positive or Normative Statement?

Answer 6

Positive as can be tested

Question 7

The Bank of England should increase Interest Rates to reduce inflation?
Positive or Normative Statement?

Answer 7

Normative-Opinion

Question 8

What’s a Value Judgement?

Answer 8

Your subjective opinion on whether something is good or bad

Question 9

What do Value Judgements influence?

Answer 9

Overall decision making and policy. Different economists will make different judgements from the same statistic.