Explain the differences between positive economic analysis and normative economic analysis. Which of these approaches do economists generally adhere to and why?
What will be an ideal response?
Positive economic analysis is an objective analysis of "what is" in the economy. Normative economic analysis is a subjective analysis of "what should be" in the economy. Economists generally stick to positive economic analysis in an attempt to remain objective and avoid making judgments about fairness.
You might also like to view...
The $/€ bid rate is the:
a. Inverse of $/€ ask rate b. Inverse of €/$ ask rate c. Equal to the €/$ ask rate d. Equal to the €/$ bid rate e. Equal to the $/€ ask rate
If demand decreases and the price doesn't change, there will be
A. a surplus. B. neither a shortage nor a surplus. C. both a shortage and a surplus. D. a shortage.
Keynesian macroeconomic theory may be summarized by the idea that demand creates _____.
Fill in the blank(s) with the appropriate word(s).
If product prices increase slower than nominal wages increase, then the real value of wages decreases.
Answer the following statement true (T) or false (F)