Question

What is "Positive Economics"?

Hint:

Remember: Positive economics is about what is Provable. Normative economics is about Notions or oNions (opinions).

Answer 1

Step 1: Understanding the Concept:
The question asks for the definition of Positive Economics, which is a branch of economic analysis concerned with describing and explaining economic phenomena.

Step 2: Detailed Explanation:
Positive Economics deals with objective, factual statements about the economy. It describes "what is," "what was," or "what will be" based on facts and data. Key characteristics of Positive Economics are: \begin{itemize} \item Factual and Objective: It is based on cause-and-effect relationships and can be tested, verified, or refuted by comparing it with real-world data. \item Descriptive: It aims to describe economic reality without making any value judgments. \item Value-Free: It does not involve personal opinions, beliefs, or recommendations about what is "good" or "bad." \end{itemize} Example: The statement "An increase in the price of petrol leads to a decrease in its quantity demanded" is a positive statement because it can be empirically tested.
This is in contrast to Normative Economics, which deals with "what ought to be" and involves value judgments and policy recommendations (e.g., "The government ought to provide free healthcare.").

Step 3: Final Answer:
Positive Economics is the branch of economics that deals with objective, fact-based statements about the economy that can be verified or refuted with evidence. It describes the economy as it is, without making value judgments.