What is the difference between a positive statement and a normative statement? D

Question

What is the difference between a positive statement and a normative statement? Determine whether the following statement is positive or normative.

a. The minimum wage creates unemployment among young and unskilled workers.
b. The minimum wage ought to be abolished.
c. If the price of a product in a market decreases, other things equal, quantity demanded will increase.
d. A little bit of inflation is worse for society than a little bit of unemployment.
e. There is a tradeoff between inflation and unemploymet in the short run.
f. If consumer income increases, other things equal, the demand for automobiles will increase.
g. The U.S. income distribution is not equitable.
h. U.S. workers deserve more liberal unemployment benefits.
i. If interest rates increase, investment will decrease.
j. If welfare benefits were reduced, the country would be better off.

Explanation / Answer

A positive statement is a statement about what is and that contains no indication of approval or disapproval. A normative statement expresses a judgment about whether a situation is desirable or undesirable a. The minimum wage creates unemployment among young and unskilled workers. Positive statement b. The minimum wage ought to be abolished. Normative statement c. If the price of a product in a market decreases, other things equal, quantity demanded will increase. Positive statement d. A little bit of inflation is worse for society than a little bit of unemployment. Positive statement e. There is a tradeoff between inflation and unemploymet in the short run. Positive statement f. If consumer income increases, other things equal, the demand for automobiles will increase. Positive statement g. The U.S. income distribution is not equitable. Positive statement h. U.S. workers deserve more liberal unemployment benefits. Normative statement i. If interest rates increase, investment will decrease. Positive statement j. If welfare benefits were reduced, the country would be better off. Normative statement

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