Positive vs Normative Economics Quiz

Which of the following is a positive economic statement?

• The government should increase the minimum wage.

• An increase in the minimum wage will lead to higher unemployment among teenagers.

• Raising taxes is unfair to the wealthy.

• The government ought to provide free healthcare.

Which statement is normative?

• The inflation rate in 2023 was 3.2%.

• The unemployment rate fell by 1% last year.

• The government should aim for zero inflation.

• Imports increased by 5% in the last quarter.

Identify the positive statement from the options below.

• The central bank should lower interest rates to boost the economy.

• Lower interest rates will increase consumer spending.

• It is better for society if everyone has a job.

• The government must reduce income inequality.

Which of the following is a normative economic statement?

• The price of oil increased by 10% last year.

• Higher oil prices lead to increased transportation costs.

• The government should subsidize renewable energy sources.

• A decrease in oil supply raises oil prices.

Select the positive economic statement.

• The government should provide universal basic income.

• Universal basic income will reduce poverty rates.

• It is unfair that some people earn more than others.

• The government must act to reduce unemployment.

Which of the following best describes the difference between positive and normative statements?

• Positive statements are opinions, while normative statements are facts.

• Positive statements can be tested or proven, while normative statements express value judgments.

• Normative statements are always true, while positive statements are always false.

• Positive statements are about what should be, while normative statements are about what is.

Given the statement: "Taxes on cigarettes reduce smoking rates." Is this statement positive or normative?

• Positive, because it can be tested with data.

• Normative, because it expresses an opinion.

• Normative, because it suggests what should be done.

• Positive, because it is a value judgment.

Which of the following statements is normative, and why?

• "The unemployment rate is 5%."

• "The government should lower taxes to encourage investment."

• "A decrease in demand leads to lower prices."

• "Exports increased by 2% last year."

A student claims: "Raising the minimum wage will increase the cost of living." Is this a positive or normative statement, and why?

• Positive, because it can be tested with evidence.

• Normative, because it is an opinion.

• Normative, because it suggests a policy.

• Positive, because it is a value judgment.

Which of the following is a normative statement, and how can you tell?

• "The central bank increased interest rates by 0.5%."

• "Higher interest rates will reduce borrowing."

• "The central bank should increase interest rates to control inflation."

• "Interest rates affect the housing market."