Positive and normative economics

Positive economics deals with scientific or objective explanations and statements about the economy – they are facts and can not be argued with.  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 attempts to describe the economy through value judgements – these are opinions and can be debated.  For example, “all debt held by developing nations should be cancelled”.

[Google]
Sponsored Links
Pages