What Is the Difference Between Positive Economic Analysis and Normative

question 210

Essay

What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement.

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Definitions:

Adjusted Trial Balance

A financial statement prepared after adjusting entries are made, ensuring the total debits equal total credits.

Financial Statement Column(s)

Sections or divisions in financial statements used to separate and categorize financial data into meaningful groups for analysis, such as assets, liabilities, equity, revenue, and expenses.

Net Income

The net income of a business following the subtraction of all costs and taxes from the overall income.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments have been made for errors, accruals, and deferrals, used to prepare financial statements.