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Positive and Normative Statements
Economics seeks to describe economic behavior as it actually exists, and it relies on a distinction between positive statements, which describe the world as it is, and normative statements, which describe how the world should be.
Two kinds of assertions in economics can be subjected to testing. One is the hypothesis. Another testable assertion is a statement of fact, such as “It’s raining,” or “Microsoft is the largest producer of computer operating systems in the world.” Like hypotheses, such assertions can be shown to be correct or incorrect. A statement of fact or a hypothesis is a positive statement.
Although people often disagree about positive statements, such disagreements can ultimately be resolved through investigation. There is another category of assertions, however, for which investigation can never resolve differences. A normative statement is one that makes a value judgment. Such a judgment is the opinion of the speaker; no one can “prove” that the statement is or is not correct. Here are some examples of normative statements in economics:
- We ought to do more to help the poor.
- People in the United States should save more for retirement.
- Corporate profits are too high.
These statements are based on the values of the person who makes them and can’t be proven false.
Because people have different values, normative statements often provoke disagreement. An economist whose values lead him or her to conclude that we should provide more help for the poor will disagree with one whose values lead to a conclusion that we should not. Because no test exists for these values, these two economists will continue to disagree, unless one persuades the other to adopt a different set of values. Many of the disagreements among economists are based on such differences in values and therefore are unlikely to be resolved.
Positive and Normative Analysis Video
Self Check: Positive and Normative Statements
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Frequently Asked Questions About a statement describing how the world should be
If you have questions that need to be answered about the topic a statement describing how the world should be, then this section may help you solve it.
What claims make a claim about the ideal state of the world?
The answer to the first question should be a) normative, as these statements specify how the world should be.
which make normative statements about how the world ought to be and descriptive ones about how the world is?
Economics relies on a distinction between “positive statements,” which describe the world as it is, and “normative statements,” which describe how the world should be, in order to describe economic behavior as it actually occurs.
Are uplifting statements idealizations of the world?
(x) Descriptive statements are positive; normative statements are normative; they prescribe how the world ought to be.
Which of these statements exemplifies positivity?
A normative statement is a subjective statement of opinion that cannot be tested, such as: The government should raise the minimum wage. A positive statement is one that can be tested, changed, or rejected by comparing it against facts, such as: Higher interest rates will lower house prices.
What kind of statement best captures the reality of the world?
A normative statement is intended to discuss how the world should be, as opposed to a descriptive statement, which is also referred to as a positive statement.
What is a normative statement example?
As a result, normative statements frequently present an opinion-based analysis of what is deemed desirable. For instance, saying that the government should aim for economic growth of x% or inflation of y% could be viewed as normative.
What does the term “normative statement” mean?
A normative statement is one that is based on a value judgment and cannot be tested to determine whether it is true or false. For instance, saying that the cost of housing is “too expensive” is a normative statement because it is based on a value judgment and cannot be determined to be “true” or “false.”
Which best encapsulates affirmative statements?
The correct response is A. Positive economic assertions are those that are factual in nature and can be verified using data.
How can I say something nice?
Use the word not as a means of denial or in opposition, never as a means of evasion. Put statements in positive form. Make definite assertions. Avoid tame, colorless, hesitating, non-committal language.
What is a declarative expression?
Expressive Statements Reflective Statements A reflective statement elaborates on a particular moment or event in time while an expressive statement simply presents that moment or event to the reader.
What is a motivational phrase?
Her life and work inspire me, so I find this book to be very inspiring. Their escape stories were frequently as inspiring as they were unbelievable. He was also an inspiring teacher.