Which of the following is an example of a normative, as opposed to positive, statement? a. If the price of a product decreases, people's willingness to buy that product will increase. b. Reducing tax rates on the wealthy would benefit the nation. c. If the national saving rate were to increase, so would the rate of economic growth. d. The elimination of trade restrictions would increase an economy's standard of living.

Question

Business

Dylan Hunter

25 April, 16:09

Which of the following is an example of a normative, as opposed to positive, statement? a. If the price of a product decreases, people's willingness to buy that product will increase. b. Reducing tax rates on the wealthy would benefit the nation. c. If the national saving rate were to increase, so would the rate of economic growth. d. The elimination of trade restrictions would increase an economy's standard of living.

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Answers (2)

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Donte Decker · Answer 1

A. If the price of a product decreases, people's willingness to buy that product will increase.

Explanation: A positive statement, on the other hand, is a factual statement. They can be tested or proven. These are objective statements. For example, the unemployment rate in India in 2017 was 7.1%. The easiest way to discern normative statements from positive statements is to whether the statement is a fact or opinion.

Positive statements are objective statements that can be tested, amended or rejected by referring to the available evidence. Positive economics deals with objective explanations and the testing and rejection of theories. For example, A fall in incomes will lead to a rise in demand for own-label supermarket foods.

In many disciplines, including economics and philosophy, a normative statement expresses a value judgment about whether a situation is desirable or undesirable ... Normative statements are characterized by the modal verbs "should", "would", "could" or "must".

Clinton Simon · Answer 2

B) Reducing tax rates on the wealthy would benefit the nation.

Explanation:

Normative statements are statements based on personal values and judgement, they are basically opinions. Normative statements cannot be proven right or wrong most of the time, because sometimes they might be right, but other times they might be wrong. On the other hand, positive statements should be based on facts, not opinions, and they can be proved right or wrong using facts.

In this case, the idea of reducing taxes on the wealthy is something very controversial. May people are in favor, a lot are are against it. But who is right? It depends on your opinion and what information you want to believe to be most relevant and important. But no one can provide only facts that prove it to be right or wrong always.