What is the primary difference between normative and positive economics?
A. Positive economics makes value judgments inappropriate to scientific research.
B. Normative economics is more firmly rooted in scientific tradition.
C. Governments use normative economics, and businesses use positive economics.
D. The goal of positive economics is to say what action people should take; this is not true in normative economics.
E. The goal of normative economics is to say what action people should take; this is not true in positive economics.
Do a little research, then take a shot.
Explain the difference between basic and market price used in the national accounts
The primary difference between normative and positive economics is related to their goals and approach.
Normative economics involves making value judgments and prescribing what actions people should take to achieve certain outcomes. It is focused on subjective opinions and personal beliefs about what should be done. Normative economics is often used in policy-making and government decision-making processes, as it aims to answer questions such as "what policies should be implemented to achieve a fairer society?" or "what actions should individuals take to promote environmental sustainability?"
On the other hand, positive economics focuses on objective analysis and explaining the facts and relationships that exist within an economic system. It aims to provide explanations and predictions about how the economy works without making value judgments. Positive economics uses empirical evidence, data, and scientific methods to analyze economic phenomena and understand cause-and-effect relationships. It addresses questions such as "what is the impact of an increase in the minimum wage on employment rates?" or "what factors influence consumer spending patterns?"
Based on this information, the correct answer is:
E. The goal of normative economics is to say what action people should take; this is not true in positive economics.