When recommending specific policies to the undertake, economists make:
- A. positive statements.
- B. claims about how the world is.
- C. normative statements.
- D. descriptive statements.
The correct answer and explanation is:
Correct Answer: C. normative statements.
Explanation:
Economists make normative statements when recommending specific policies because such recommendations involve value judgments and opinions about what should be done. Unlike positive statements, which describe the world as it is based on objective analysis and facts, normative statements are prescriptive and express what ought to happen based on ethical, political, or social considerations.
For example, an economist might say:
- “The government should increase minimum wages to reduce income inequality.”
- “Taxes on carbon emissions should be raised to combat climate change.”
These statements include a value-based judgment about what is “better” or “worse” for society. Different economists or policymakers may disagree on such recommendations depending on their ideological perspectives, ethical values, or political goals.
Difference Between Normative and Positive Statements:
- Positive Statements: Fact-based, can be tested and verified. Example: “A higher minimum wage reduces employment among low-skilled workers.”
- Normative Statements: Opinion-based, involve value judgments. Example: “The government should ensure a living wage for all workers.”
While positive economics provides the scientific basis for understanding economic relationships, normative economics focuses on what should be done to achieve certain economic and social goals. Policymakers rely on both types of analysis: they use positive economics to understand economic mechanisms and normative economics to decide policy actions based on societal priorities.
Thus, when economists recommend specific policies, they engage in normative analysis, making judgment calls rather than stating objective facts.