Positive And Negative Statements In Economics

Positive economics as opposed to normative economics is the branch of economics that concerns the description and explanation of economic phenomena.

Positive and negative statements in economics. Positive statements tend to focus on statements about what is instead of opinions or what ought to be a normative statement. One is a hypothesis like unemployment is caused by a decrease in gdp this claim can be tested empirically by analyzing the data on unemployment and gdp. When considered together positive economics and normative economics provide a clear understanding of public policies. Positive statements and positive reasoning more generally are objective.

In economics we tend to view our study as exploring questions about the truth and the way that people behave. We make guesses about behavior that people engage in. Positive economics is objective and fact based where the statements are precise descriptive and clearly measurable. These fall into two categories.

These fall into two categories. For examples an increase in taxation will result in less consumption and a fall in supply of petrol will lead to an increase in its price. Positive statements are based on empirical evidence. Positive statements are objective statements that can be tested amended or rejected by referring to the available evidence positive economics deals with objective explanation and the testing and rejection of theories.

Positive economics clearly define economic issues. It focuses on facts and cause and effect behavioral relationships and includes the development and testing of economic theories. Well in this section we will take some examples of positive economics and will explain why we call them positive economics statements. As such they can be tested.

Positive statements and positive reasoning more generally are objective. One is a hypothesis like unemployment is caused by a decrease in gdp this claim can be tested empirically by analyzing the data on unemployment and gdp. These statements can be measured against tangible evidence or historical. Unlike normative economics in which the remedies are provided for the economic issues on the basis of value judgment.

A fall in incomes will lead to a rise in demand for own label supermarket foods. Positive statements are thus the opposite of normative statements. The statements of positive economics can be scientifically tested proved or disproved which cannot be done with statements of normative economics. An earlier term was value free german.

What are positive statements. These two theories cover both the actual and real facts and statements.