Question

Which of the following is an example of normative economic analysis?

A. Normally, higher taxes create higher tax revenues for the government.
B. Higher taxes are desirable because we need to decrease the debt.
C. Higher taxes often create an economic slowdown.
D. The slowdown effect of higher taxes can be offset by increased spending.
E. Paying off the debt by decreasing other types of government spending will create an economic slowdown.

***Would it be B or D @jim_thompson5910 ? :/

Answer 1

This is the math section.

Answer 2

this one?

Answer 3

yes:)

Answer 4

do we have a definition for 'normative economic analysis'

Answer 5

it represents what ought to be right? not what should be? what should be would be positive economic analysis right?

Answer 6

but I'm not really sure which of the choices identifies something that is an opinion :(

Answer 7

An example of a normative economic statement would be, "We should cut taxes in half to increase disposable income levels". By contrast, a positive (or objective) economic observation would be, "Big tax cuts would help many people, but government budget constraints make that option infeasible."

A perspective on economics that incorporates subjectivity within its analyses. It is the study or presentation of "what ought to be" rather than what actually is. Normative economics deals heavily in value judgments and theoretical scenarios. It is the opposite of positive economics.

http://www.investopedia.com/terms/n/normativeeconomics.asp

Answer 8

ahh okay.. so would it be B ? :/

Answer 9

or oh wait... E? because they're talking about what something will do if it's put into effect? not what something that actually is?

Answer 10

im not good with word stuff :) i dont think i could make an educated guess on this one

Answer 11

http://economics.about.com/od/economics-basics/a/Positive-Versus-Normative-Analysis-In-Economics.htm

some examples

Answer 12

B looks best to me, but i cant say for sure

Answer 13

ahh okay:) thank you! yeah the wording's kind of weird to me!!

Answer 14

if it sounds like its appealing to an emotion or a value judgement ... its normative ... if its stating a fact only, its positive

Answer 15

Oh so would you happen to know this one?

Which of the following is an example of a positive economic statement?
A. Raising the minimum wage will hurt the economy.
B. Free trade and NAFTA will lead to the loss of high wage U.S. manufacturing jobs and hurt the economy.
C. People such as Ross Perot assert that free trade will make you worse off, and they have the charts and facts to prove it.
D. Free trade agreements and NAFTA will reduce the prices of imported goods by eliminating certain trade barriers and tariffs (taxes).
E. Free trade is bad because will take away people’s jobs.

***I think it's B, C, or D? what do y'all think? :/

Answer 16

oh wait... not B right? either C or D? :/ leaning more towards D though... would that be correct?

Answer 17

positive states a fact, not an opinion

Answer 18

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

http://tutor2u.net/economics/revision-notes/as-markets-positive-normative.html

Answer 19

so does D fit that criteria? :O

Answer 20

oh wait, so is C the better option?

Answer 21

A normative economic analysis are economic statements or theories that cannot be proven empirically.

Answer 22

ooh so it would be C? since it could be backed up by the charts?

Answer 23

A. Raising the minimum wage will hurt the economy.
^^^^ emotional

B. Free trade and NAFTA will lead to the loss of high wage U.S. manufacturing jobs and hurt the economy.
^^^^ emotional


C. People such as Ross Perot assert that free trade will make
you worse off, and they have the charts and facts to prove it.
^^^^^ judgemental


D. Free trade agreements and NAFTA will reduce the prices of imported goods by eliminating certain trade barriers and tariffs (taxes).


E. Free trade is bad because will take away people’s jobs.
^^^^ judgemental

Answer 24

ahhh hahah so it's D then?! :O

haha so i'll take note that emotional and judgmental equals normative!!

Answer 25

if it sounds like something a democrat would say ... its normative

if it sounds like something a republican would say, its positive

:)

Answer 26

yeah, D is my bet ... not sure, but thats the one i would go for

Answer 27

ahh okay yay! :) thanks for the explanations too hehe especially the last one!! :D

Answer 28

google helped :) good luck

Answer 29

i love google!! and thank you :)