The difference between positive statements and normative statements is that
A) a positive statement involves a value judgment and a normative statement is a statement of fact.
B) a positive statement is a statement of fact and a normative statement involves value judgments.
C) value judgments are made in normative statements but assumed in positive statements.
D) normative statements are provable while positive statements are not.
Answer: B
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In the short-run along the horizontal portion of the aggregate supply curve, an increase in the budget deficit and an expansionary monetary policy would:
A) increase the price level only. B) increase both the price level and real income. C) increase real income only. D) none of the above.
A labor market is divided into two segments. All workers have the same qualifications and find jobs in either segment equally attractive. Initially, both segments are in competitive equilibrium. Then the development of employer prejudice reduces employment of minorities in one segment. In the long run, there will likely be a change in
a. wage rates and the composition of the work force in both segments b. neither wage rates nor the composition of the work force in either segments c. wage rates, but not the composition of the work force, in both segments d. the composition of the work force, but not wage rates, in both segments e. the wage rate, but not the composition of work force, in the discriminating segment only