Question

In: Economics

Which of the following is a positive statement and which of the following is a normative statement?


Which of the following is a positive statement and which of the following is a normative statement? 

 Increasing the minimum wage increases the unemployment rate.

 The minimum wage should be increased.

 The number of tariffs ought to bel reduced.

 This country should seek to maximize the rate of employment above all other goals.


Solutions

Expert Solution

Positive statements can be tested. It is based on facts. It is objective.

Normative statements are opinion-based and cannot be proved. It is subjective. The main difference between normative and positive statements are whether it is based on fact or opinion.

Statement 1 is positive as it can be tested.

Statement 2 is normative. It is an opinion and cannot be tested.

Statement 3 is normative. It is also an opinion and cannot be tested.

Statement 4 is normative. It is also an opinion and is subjective.


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