The Difference Between Positive Economic Statements and Normative Economic Statements

question 71

Multiple Choice

The difference between positive economic statements and normative economic statements is that

• A) positive statements are based on opinion while normative statements are based on fact
• B) positive statements are true and normative statements are often false
• C) positive statements are often false and normative statements are true
• D) positive statements are based on fact while normative statements are based on opinion
• E) both b and d.

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Definitions:

Quantity Demanded

The combined sum of a good or service that purchasers can and are eager to acquire at an established price level.

Government Intervention

Actions taken by a government to affect the economy, which can include policies, regulations, subsidies, tax incentives, and direct spending.

Market Equilibrium

A situation where the quantity of goods supplied is equal to the quantity of goods demanded, often resulting in a stable market price.

Excess Demand

A situation in the market where the quantity demanded of a good or service surpasses the quantity supplied at the current price, leading to upward pressure on prices.