1.1.2 Positive and Normative Economic Staements

• Importance of Positive and Normative Economic Statements


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  • PS are used to analyse economic phenomena objectively
  • NS help shape policies based on ethical, political or value based considerations
• Role of Value Judgements

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  • Economic decisions often involve choices influenced by individual or societal values (policies such as taxation, subsidies and regulation)
  • Different people and groups may hold conflicting values, leading to debates over economic policies
  • Ethical considerations also play a part in decisions on resource allocation, distribution of wealth and environmental protection
  • Public opinion, shaped by values and beliefs, can influence government polices