Positive & normative statements

In economics, positive statements are statements that describe what is, while normative statements are statements that describe what ought to be. Positive statements are objective and can be tested and verified through the use of empirical evidence, while normative statements are subjective and involve value judgments.

Positive statements are statements of fact that describe economic phenomena or relationships. They are based on empirical evidence and are intended to be objective and unbiased. 

Examples of positive statements in economics include "The supply of a good increases as the price of the good increases," and "The unemployment rate in the United States was 5% in 2020." These statements describe economic relationships or phenomena that can be observed and verified through the use of data and evidence.

Normative statements, on the other hand, are statements that express value judgments or opinions about what should or ought to be. They involve subjective opinions and are not based on empirical evidence, but rather on the values and beliefs of the person making the statement. 

Examples of normative statements in economics include "The government should increase taxes on the wealthy to reduce income inequality," and "The minimum wage should be raised to $15 per hour." These statements express opinions about what policy actions should be taken and are based on the values and beliefs of the person making the statement.

It is important to distinguish between positive and normative statements in economics, as they serve different purposes and require different approaches to analysis.

 Positive statements can be tested and verified through the use of empirical evidence, while normative statements are subjective and involve value judgments that cannot be objectively tested. 

Understanding the distinction between positive and normative statements is essential for conducting sound economic analysis and for making informed policy decisions.