What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement
What will be an ideal response?
Positive economic analysis is concerned with what is. Positive economic analysis reaches conclusions based on verifiable statements. Normative economic analysis, on the other hand, is concerned with what ought to be. Normative analysis reaches conclusions based on opinions. (Students will give many different examples.)
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In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, an open market sale ________ the supply of reserves causing the federal funds rate to ________, everything else held constant
A) decreases; decrease B) increases; decrease C) increases; increase D) decreases; increase
Which of the following accounted for the highest percentage of state and local spending?
a. education and health care b. police and fire protection c. highways d. social security