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.
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E. The goal of normative economics is to say what action people should take; this is not true in positive economics.
The primary difference between normative and positive economics is as follows:
E. The goal of normative economics is to say what action people should take; this is not true in positive economics.
Normative economics deals with subjective opinions, values, and judgments about how things ought to be. It focuses on providing recommendations or prescriptions about what actions or policies should be taken to achieve certain goals or values.
On the other hand, positive economics aims to analyze and explain economic phenomena based on objective facts, data, and cause-effect relationships. It seeks to describe and understand how things are, without making any value judgments or prescribing specific actions.
Therefore, the key distinction is that normative economics involves judgments and recommendations for action, while positive economics is concerned with objective analysis and explanation.
The primary difference between normative and positive economics is their goals and the way they approach economic analysis.
Normative economics deals with subjective judgments and opinions about what economic outcomes should be. It focuses on making value judgments and prescribing what actions or policies people should take to achieve desired outcomes. Normative economics is primarily concerned with what 'should' be or what 'ought' to be according to societal or personal preferences. In other words, normative economics involves subjective opinions about what is morally right or wrong, fair or unfair, and desirable or undesirable.
On the other hand, positive economics is objective and based on scientific methods. It focuses on what 'is' or what is actually happening in the economy, without making any value judgments or prescribing what actions should be taken. Positive economics aims to describe and understand economic phenomena, analyze cause-and-effect relationships, and formulate theories and predictions based on empirical evidence.
Therefore, the correct answer to the question is:
E. The goal of normative economics is to say what action people should take; this is not true in positive economics.