1). Positive and Normative Statements

• What is a positive statement?

  Objective statements that are based on fact and can be tested as true or false. Positive statements are value-free.
• What is a normative statement?

  Subjective statements which cannot be tested as true or false. They are value judgements.
• The role of value judgements:

  Value judgements can influence economic decision making and policy. Different economists may make different judgements from the same statistic, for example rising inflation could mean different things.