Multiple Choice
In the context of positive and normative analysis, what does it mean to say that two variables are positively associated?
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0. Basic Principles of Economics
Positive and Normative Analysis
Multiple Choice
Which of the following best describes the difference between positive and normative analysis in economics?
A
Positive analysis deals with objective statements about what is, while normative analysis involves subjective judgments about what ought to be.
B
Normative analysis is used to test economic theories, while positive analysis is used to make policy recommendations.
C
Both positive and normative analysis are purely descriptive and do not involve any value judgments.
D
Positive analysis is concerned with ethical values, while normative analysis focuses on factual data.
Verified step by step guidance1
Step 1: Understand the definitions of positive and normative analysis in economics. Positive analysis focuses on objective, fact-based statements that describe 'what is' without involving opinions or value judgments.
Step 2: Recognize that normative analysis involves subjective judgments and opinions about 'what ought to be,' incorporating ethical values and recommendations based on personal or societal preferences.
Step 3: Compare the options given by identifying which one correctly contrasts the objective nature of positive analysis with the subjective nature of normative analysis.
Step 4: Eliminate options that incorrectly describe the roles of positive and normative analysis, such as mixing up their purposes or suggesting both are purely descriptive without value judgments.
Step 5: Conclude that the best description is the one stating that positive analysis deals with objective statements about what is, while normative analysis involves subjective judgments about what ought to be.
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