a) Positive and normative statements

a) Distinction between positive and normative economic statements

b) The role of value judgements in influencing economic decision making and policy

A positive statement = an objective statement that

• Is based on empirical evidence

• And can be proven true or false

A normative statement = a value judgement that

• Is an expression of an opinion or belief

Value judgements influence individual economic decisions

• Example:

  • choosing to boycott companies due to unethical business decisions

Value judgements influence the government’s economic policies

• Example:

  • choosing to spend more money on healthcare over defence