Differentiate positive vs normative

• What does positive economics describe?

  How the economy actually works
• Why is the statement "The government should increase minimum wage to reduce poverty" considered normative economics?

  It presents an opinion on policy, not a fact
• What does normative economics deal with?

  Opinions and values about economic outcomes
• Why is the statement "Higher taxes lead to lower consumer spending" considered positive economics?

  It can be verified through economic data
• Does positive economics express opinions?

  No, it does not express opinions
• What does normative economics focus on?

  How the economy should function
• How does positive economics differ from normative economics?

  Positive economics focuses on facts, normative on opinions
• Can normative economics be tested with objective data?

  No, it cannot be tested with objective data
• Why is the statement "The government should cut taxes to stimulate growth" considered normative?

  It presents an opinion on economic policy
• What does it mean for positive economics to have testable statements?

  They can be verified using objective data
• What does data-driven mean in positive economics?

  It is based on empirical evidence
• What is a normative statement?

  An opinion on how the economy should function
• How is normative economics subjective?

  It is based on personal views
• What role does normative economics play in shaping economic decisions?

  It influences opinions and guides policy-making
• What are the characteristics of normative economics?

  • Value judgments: Opinions on economic outcomes
  • Subjective: Based on personal views
  • Prescriptive: Suggests actions for improvement
  • Policy-oriented: Guides economic policy decisions
• What is the focus of policy-oriented normative economics?

  Guiding policy decisions and economic choices
• What is the focus of positive economics?

  Factual statements that can be tested
• How does normative economics differ from positive economics?

  Normative economics cannot be tested with data
• What type of facts does positive economics use?

  Testable facts about the economy
• What is a characteristic of positive economics?

  Testable statements
• What are value judgments in normative economics?

  Opinions about what ought to happen
• How can the statement "An increase in interest rates reduces borrowing" be validated?

  Through economic data
• How is positive economics described in terms of objectivity?

  It is free from personal opinions
• What does a normative statement express?

  How the economy should function
• How can a positive statement be verified?

  It can be proven or disproven
• What do positive statements describe?

  What is happening in reality
• Compare positive and normative statements regarding taxes and consumer spending.

  • Positive Statement:
  • Taxes decrease consumer spending
  • Normative Statement:
  • Taxes should be lowered
  • Key Difference:
  • Positive focuses on actual effects, normative suggests desired policy.
• What are the two types of statements discussed?

  Positive and normative statements
• What do normative statements express?

  What should happen or is best
• What is a positive statement about taxes?

  "Higher taxes lead to lower consumer spending"
• What is a positive statement about unemployment?

  "Unemployment rises during recessions"
• What is the main distinction between positive and normative statements?

  Positive is about reality; normative is about ideals
• How do positive and normative statements differ?

  • Positive statements: Describe what is happening
  • Normative statements: Describe what should happen
• What is a normative statement regarding government investment?

  "The government should invest more in infrastructure"
• What is a positive statement?

  A factual statement about the economy
• Why is "Unemployment rises during recessions" considered a positive statement?

  It is validated by economic data
• What is a normative statement regarding minimum wage?

  "The government should increase minimum wage"
• What does the statement "The government should invest more in infrastructure" suggest?

  It suggests a desired policy action
• What type of statements does positive economics use?

  Descriptive statements
• What is the purpose of normative economics?

  To guide policy discussions and economic decisions