1.1.2 Positive and normative economic statements

• Positive economic statements describe economic phenomena without expressing a personal opinion or value
• Positive economic statements are objective and can be tested using empirical data
• Match the characteristic with its description for positive economic statements.

  1️⃣ Objectivity

  2️⃣ Based on facts, not opinions

  3️⃣ Testability

  4️⃣ Can be tested using data

  5️⃣ Verifiability

  6️⃣ Can be proven true or false
• Positive economic statements cannot be verified, as they are based on opinion.

  False
• An example of a positive economic statement is "An increase in interest rates leads to lower consumer spending
• The statement "The unemployment rate is currently4.5%" is a positive economic statement.
• Match the positive economic statement with its explanation.

  "Increased government spending boosts economic growth" ↔️ Measured by tracking GDP changes against government spending

  "Higher interest rates reduce inflation" ↔️ Empirical data on interest rates and inflation confirm

  "Higher tax rates decrease investment" ↔️ Investment levels analyzed alongside tax rates

  "Improved education increases labor productivity" ↔️ Data on education and productivity supports
• Positive economic statements can be proven true or false using available data
• Positive economic statements are subjective and value-based.

  False
• Positive economic statements are based on factual observations rather than subjective beliefs
• Positive economic statements are objective and fact-based
• What are positive economic statements about?

  Objective economic phenomena
• Positive economic statements are based on factual observations
• Positive economic statements can be tested using empirical data.
• What does it mean for a positive economic statement to be verifiable?

  Proven true or false
• Order the characteristics of positive economic statements and normative economic statements based on their nature, testability, and examples:

  1️⃣ Positive: Objective, fact-based

  2️⃣ Positive: Can be verified with data

  3️⃣ Normative: Subjective, value-based

  4️⃣ Normative: Cannot be verified
• Positive economic statements reflect personal opinions or value judgments.

  False
• What is the inflation rate mentioned in the example of a positive economic statement?

  2%
• Higher interest rates reduce inflation
• Match the positive economic statement with its explanation:

  The inflation rate is 2% ↔️ Based on data collected by statistical agencies

  Increased government spending boosts GDP ↔️ Supported by econometric analysis
• What type of data is used to confirm that higher interest rates reduce inflation?

  Historical interest rate and inflation data
• Normative economic statements express opinions and value judgments.
• Normative economic statements are based on personal beliefs rather than factual information
• Match the characteristic with the type of economic statement:

  Objective, fact-based ↔️ Positive

  Subjective, value-based ↔️ Normative
• What is the main characteristic of normative economic statements?

  Subjectivity
• Normative economic statements can be tested against empirical data.

  False
• What is a value-based normative statement concerned with?

  Ethical or moral considerations
• Normative statements are untestable because they cannot be proven true or false
• "The government should increase taxes on the wealthy" is an example of a normative economic statement.
• What is an example of a normative statement about education?

  Education should be free
• Normative statements are based on factual observations rather than subjective beliefs.

  False
• Why are normative statements untestable?

  Reflect personal beliefs
• The statement "Education should be free for all citizens" is an example of a normative
• Match the characteristic with the type of economic statement:

  Objective, fact-based ↔️ Positive

  Subjective, value-based ↔️ Normative
• What is the nature of positive economic statements?

  Objective and factual
• Positive economic statements can be tested through empirical data.
• Why are positive economic statements verifiable?

  Can be proven true or false
• The statement "The inflation rate is currently 2%" is an example of a positive
• Positive economic statements describe how the economy operates without personal opinions.
• What economic variable is mentioned in the positive statement about higher interest rates?

  Inflation