Question

Classify each of the following statements as positive or normative.

Answer 1

Answer:

Positive Economics is the branch that deals with analysis of relationship among variable for establishment of cause and effects.

Normative Economics is the branch that deals with value judgement, what ought to be and not.

Statement                                                                 Classification

1. Economic development should not               Normative Economics

take place at the expense of social justice.

2. The government can increase labor             Positive Economics

productivity by improving public education.

3. Society faces a short-run trade-off                Positive Economics  

between inflation and unemployment.

4. The Federal Reserve should take                  Normative Economics

action to lower the inflation rate.

5. The government must take action                 Normative Economics

to reduce the unemployment rate.