Question:
The core difference between normative economics and positive economics is that:
(1) normative economics provides descriptive analysis while positive economics offers policy prescriptions.
(2) positive economics is fact-based while normative economics is value-based.
(3) normative economics is based on empirical evidences while positive economics is based on subjective opinions.
(4) positive economics relies on value-judgements while normative economics is objective.
(5) positive economics focuses on ethics while normative economics deals with testable hypotheses.
Correct Answer:
(2)
Answer Explanation:
Positive economics deals with objective facts (“what is”) that can be tested, while normative economics deals with subjective opinions and value judgments (“what should be”). Option (2) correctly identifies this distinction.
Topic: Introduction Year: 2024
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