What Is the Distinction Between a Positive and a Normative

question 64

Multiple Choice

What is the distinction between a positive and a normative statement?

• A)Positive statements are assertions that can be tested with data,whereas normative statements are based on a value system of beliefs.
• B)Normative statements are assertions that can be tested with data,whereas positive statements are based on a value system of beliefs.
• C)The distinction depends on the context in which each statement is used.
• D)Positive statements are correct statements of fact,whereas normative statements are incorrect.

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Definitions:

Supply-Side Economics

An economic theory that argues economic growth can be most effectively created by lowering taxes and decreasing regulation, to incentivize investment and production.

Rational Expectationists

A group of economists who believe that individuals make predictions about future economic activities based on available information and in a rational manner.

Laffer Curve

A theoretical representation of the relationship between government revenue raised by taxation and all possible rates of taxation, suggesting an optimal tax rate to maximize revenue.

Inflation

The pace at which prices for products and services generally ascend, reducing monetary value.