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Essentials of Economics (MindTap C...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091992

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BuyFindarrow_forward

Essentials of Economics (MindTap C...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091992
Textbook Problem

Which of the following is a positive, rather than a normative, statement?

a. Law X will reduce national income.

b. Law X is a good piece of legislation.

c. Congress ought to pass law X.

d. The president should veto law X.

To determine

Positive and normative statements.

Explanation

Option (a):

“The law x will reduce the national income” is a positive statement; this is because it focused on the cause-and-effect behavioral relationship of law x and national income. Generally, economics is about positive analysis; it focused on cause-and-effect behavioral relationships and includes development and testing of economic theories. Positive economic statements do not have to be correct, but they must be able to be tested and proved or disproved. Thus, option “a” is correct.

Option (b):

“The law x is a good piece of legislation” is a normative statement; this is because it is subjective and opinion-based...

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