Credit portal




Positive and Normative Statements

what are normative statements

Type: Study notes Levels: AS, A Level Exam boards: AQA, Edexcel, OCR, IB, Other

Whenever you are reading articles on current affairs it is important to be able to distinguish between objective and subjective statements

Positive statements are objective statements that can be tested, amended or rejected by referring to the available evidence. Positive economics deals with objective explanation and the testing and rejection of theories. For example:

  • A fall in incomes will lead to a rise in demand for own-label supermarket foods
  • If the government raises the tax on beer, this will lead to a fall in profits of the brewers.
  • The rising price of crude oil on world markets will lead to an increase in cycling to work
  • A reduction in income tax will

    improve the incentives of the unemployed to find work.

  • A rise in average temperatures will increase the demand for sun screen products.
  • Higher interest rates will reduce house prices
  • Cut-price alcohol has increased the demand for alcohol among teenagers
  • A car scrappage scheme will lead to fall in the price of second hand cars

Normative Statements

A value judgement is a subjective statement of opinion rather than a fact that can be tested by looking at the availableevidence

Normative statements are subjective statements – i.e. they carry value judgments. For example:

Focusing on the evidence is called adopting an empirical approach – evidence-based work is becoming more and more important in shaping different government policies and how much funding to give to each.

Category: Forex

Similar articles: