Determine if the following items represent an example of positive economics or normative economics. The richest 1% of Americans should pay more taxes than the rest of the 99%. A decrease in the supply of coconut will increase the price of German chocolate cake, a good which requires coconut shavings as a key ingredient. The higher the minimum wage, the higher the price of goods and services is likely to be. Social welfare spending in Sweden occupies too large a portion of the national budget.
Added by David W.
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- Positive economics deals with objective statements that can be tested or verified with data. It focuses on "what is." - Normative economics involves subjective value judgments or opinions about what "should be" or what is "good" or "bad." Show more…
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Determine whether each of the following items reflects positive analysis or normative analysis."The richest 1% of Americans should pay more taxes than the remaining 99%." "A decrease in the supply of coconut will increase the price of German chocolate cake, a good for which coconut shavings are a key ingredient." "Social welfare spending in Sweden occupies too large a portion of the national budget." "The higher is the minimum wage, the higher the prices of goods and services are likely to be."
Oluwadamilola A.
Classify each of the following statements as positive or normative: Statement Society should reduce pollution at all costs: A reduction in the rate of money growth will reduce the rate of inflation: Lower tax rates encourage more work and more saving: Economic development should not take place at the expense of social justice: Policy makers face trade-off between equality and efficiency:
Azat N.
Classify each of the following statements as positive or normative. Explain. a. Society faces a short-run trade-off between inflation and unemployment. b. A reduction in the growth rate of the money supply will reduce the rate of inflation. c. The Federal Reserve should reduce the growth rate of the money supply. d. Society ought to require welfare recipients to look for jobs. e. Lower tax rates encourage more work and more saving.
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