Whenever you are reading articles on current affairs it is important to be able to distinguish between objective and subjective statements. Positive Economics would be a statement like the global economy has risen by 3% in the last year (This is not true) Normative Economics would be a statement  How to distinguish between positive and normative economics. Economics, Department of. Normative and Positive Economics. John B. Davis. Marquette University, @ Published version.


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Contact Positive and Normative Economics There are two fundamentally different approaches to teaching economics: This is important to know, depending on the approach chosen, the same topic may be presented in an entirely different way.

Positive and normative economics

Thus, being aware of this will help you gain a more comprehensive knowledge on normative and positive economics issues. The science is the positive economics — finding data such as inflation and unemployment statistics. However, with this data, you can make very different judgements.

Because, again, it could, in theory, be tested. It does not say that rural incomes in developing countries ought to be raised, just that higher farm prices will have that effect.

To say that rural normative and positive economics should be raised is a normative statement, which you may well agree with, especially if you live and work in the rural areas of a developing country, or believe that normative and positive economics rural incomes is the best way to reduce poverty.

On the other hand, if you live in the city of a developing country and believe that the removal of CAP subsidies will raise food prices, or if you are an EU food producer dependent upon CAP subsidies, you may feel differently about this - you may be less keen on raising rural incomes in developing countries, unless other ways can be found of achieving it.

Difference Between Positive and Normative Economics

Normative economics talks about the opinions and judgments. Nature of the branch The nature of positive economics is factual and descriptive. The nature of normative economics is prescriptive. Normative and positive economics of argument behind Type of argument behind positive economics is objective.

The statement, "government-provided healthcare increases public expenditures" is a positive economic statement, as it can be proved or disproved by examining healthcare spending data in countries like Canada and Britain, where the government provides healthcare.


Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.

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  • Positive and Normative Economics

Positive economics is descriptive, but normative economics is prescriptive. Positive economics explains cause and effect relationship between variables.