Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 2 - Thinking Like an Economist - Questions For Review - Page 35: 9

Answer

A positive statement is an assertion about how the world is. A normative statement is an assertion about how the world ought to be. When economists make normative statements, they are acting more as policy advisers than scientists. An example of a positive statement is "Minimum wage laws cause unemployment." An example of a normative statement is "The government should raise the minimum wage."

Work Step by Step

A good way of thinking about whether a statement is positive or normative is to judge its validity. We can in principle confirm or refute positive statements by evaluating evidence. However, normative statements are usually a matter of opinion and cannot be judged using data alone.
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