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Positive and Normative Economics


Positive economics deals with scientific or objective explanations and statements about the economy.  For example it is possible for me to state that in the case of normal goods an increase in the price will lead to a decrease in the quantity demanded. 


Normative economics attempt to describe the economy through value judgements.  For example "the rich should be taxed at a far higher rate than the poor" contains value judgement about the role of the government, therefore it is a normative statement.



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