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, testable facts and cause-and-effect relationships (“what is”). Normative economics involves subjective value judgments, ethics, and opinions about what ought to happen (“what should be”).
Topic: Introduction Year: 2024
Leave a Reply