Positive economics deals with scientific or objective explanations and
statements about the economy. For example it is possible for me to state that
in the case of normal goods an increase in the price will lead to a decrease in
the quantity demanded.
Normative economics attempt to describe the economy through value
judgements. For example "the rich should be taxed at a far higher rate than
the poor" contains value judgement about the role of the government,
therefore it is a normative statement.
Positive and normative statements can be made about anything.
No comments:
Post a Comment