1.1.2 Positive and normative economic statements

• Normative economic statements are subjective and cannot be empirically verified
• Normative economic statements reflect personal beliefs about what is desirable or undesirable.


  True
• What is an example of a positive economic statement?

  The unemployment rate is 5%
• What is an example of a normative economic statement?

  The government should reduce taxes
• What are normative economic statements based on?

  Opinions and value judgments
• What do positive economic statements describe?

  What is happening
• How are normative economic statements contrasted with positive economic statements?

  Prescribe vs describe
• Positive statements are based on value judgments.

  False
• Match the type of statement with its description:

  Positive Statement ↔️ Factual and objective

  Normative Statement ↔️ Based on opinions and value judgments
• An example of a normative statement is: "The government should increase welfare benefits."
• Positive economic statements are factual, objective statements about the economy that can be empirically verified
• Positive statements describe what is, while normative statements prescribe what should
• What is an example of a normative economic statement?

  The government should increase taxes
• Positive economic statements are objective and can be empirically verified
• Normative economic statements are subjective and reflect personal beliefs
• What is a key difference between positive and normative economic statements?

  Verifiability
• Normative economic statements can be proven or disproven empirically.

  False
• Positive statements are based on subjective opinions.

  False
• Match the type of statement with its characteristic:

  Positive Statement ↔️ Factual and objective

  Normative Statement ↔️ Based on opinions and value judgments
• An example of a normative statement is: "The government should reduce taxes."
• What is the purpose of normative statements in economics?

  Express opinions
• Why is it significant to understand the distinction between positive and normative statements?

  Impartial economic reasoning
• Positive economic statements express value judgments about what the economy ought to be like.

  False
• What is an example of a positive economic statement?

  Inflation is currently 3%
• What is a characteristic of positive economic statements?

  Can be empirically verified
• Normative economic statements describe what is happening in the economy.

  False
• Normative economic statements are subjective and cannot be empirically verified
• An example of a normative statement is: "The government should reduce taxes."
• An example of a positive statement is: "Inflation is currently 3%"
• What is the primary characteristic of positive economic statements?

  Empirical verifiability
• What is the key difference between positive and normative economic statements in terms of objectivity?

  Fact vs opinion
• Normative statements can be empirically verified because they reflect personal beliefs.

  False
• Normative statements reflect the desired outcomes of economic policies.

  True