2. Issue related to unemployment are stuull
macro level d) none of these
3. Positive economics involve statement which are a) verifiable b) not verifiable c) may or may not be
verifiable d) none of these
free economy c) mixed economy d) both b&c
Answers
Answer:
What are positive statements?
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
What are Normative Statements?
A value judgement is a subjective statement of opinion rather than a fact that can be tested by looking at the available evidence
Normative statements are subjective statements – i.e. they carry value judgments. For example:
Pollution is the most serious economic problem
Unemployment is more harmful than inflation
The congestion charge for drivers of petrol-guzzling cars should increase to £25
The government should increase the minimum wage to £7 per hour to reduce poverty.
The government is right to introduce a ban on smoking in public places.
The retirement age should be raised to 70 to combat the effects of our ageing population.
Resources are best allocated by allowing the market mechanism to work freely
The government should enforce minimum prices for beers and lagers sold in supermarkets and off-licences in a bid to control alcohol consumption