An example of a prescriptive economic statement is: “The government should provide primary health care to all citizens.” As you can infer from this statement, it is values-based, rooted in a personal perspective, and meets the requirement of what “should be.” Normative economics is subjective and values-based and arises from personal perspectives, feelings, or opinions involved in the decision-making process. Prescriptive economic statements are rigid and prescriptive. They often seem political or authoritarian, which is why this industry is also called “what should be” or “what should be” economic. Positive economics and normative economics are two standard branches of modern economics. Positive economics describes and explains various economic phenomena, while normative economics focuses on the value of economic justice or what the economy should be. Just as the positive economy describes economic programs, situations, and conditions as they exist, normative economics aims to prescribe solutions. Prescriptive economic statements are used to identify and recommend ways to change economic policy or influence economic decisions. Normative economics focuses on ideological, dictive, and dictive, opinion-based value judgments and “what should be” statements that target economic development, investment projects, and scenarios. Its purpose is to summarize people`s interest (or lack thereof) in various economic developments, situations, and programs by asking or quoting what should happen or what should be. Although normative statements are generalized and subjective, they function as necessary channels for original thinking.

Such opinions can form the basis for necessary changes that have the potential to completely change a particular project. But normative economics cannot be the only basis for decisions on major economic fronts. The positive economy fulfills the objective point of view, which focuses on facts and cause and effect. In conjunction with positive economics, normative economics can be useful in establishing, generating, and realizing new ideas and theories for different economic goals and perspectives. Economic statements from a positive economic perspective can be broken down into determinable and observable facts that can be examined and tested. Because of this characteristic, economists and analysts often practice their profession under the positive economic aspect. The positive economy, the measurable perspective, helps policymakers and other government and economic agencies decide on important issues that affect specific policies under the direction of evidence-based outcomes. Behavioral economics has also been accused of being normative in the sense that cognitive psychology is used to get people to make desirable decisions by building their electoral architecture.

However, policymakers, entrepreneurs, and other organizational authorities also tend to consider what is desirable and what is not desirable for their respective constituents, making normative economics an important part of the equation for deciding important economic issues. Coupled with a positive economy, normative economics can branch into many opinion-based solutions that reflect how an individual or an entire community represents certain economic projects. These types of views are particularly important for national policy makers or leaders. Positive, normative economic statements are needed to create the policies of a country, region, industrial sector, institution or company. Statement: In the city, more than 75% of the population lives in slums and substandard houses, reflecting the government`s housing and urban development policies. Unlike positive economics, which relies on objective analysis of data, normative economics is heavily interested in value judgments and statements about “what should be,” rather than facts based on statements of cause and effect. It expresses ideological judgments about what can lead to economic activity when public policy changes are made. Prescriptive economic statements cannot be verified or verified.

Positive economics is an economic stream that focuses on the description, quantification and explanation of economic developments, expectations and related phenomena. It is based on an objective analysis of data, relevant facts and related figures. It attempts to establish cause-and-effect relationships or behavioral associations that can help identify and test the development of economic theories. Normative economics is the branch of economics that deals with how economic problems facing society should be solved. It deals with economic policy and objectives and how they can be achieved. It looks at what should be or what should be. It cannot be verified in terms of logical and empirical evidence. A clear understanding of the difference between positive and normative economics can lead to better policy-making if the policy is based on a balanced mix of facts (positive economics) and opinions (normative economics). Nevertheless, many policies on issues ranging from international trade to welfare are based, at least in part, on normative economics.

To put it simply, the positive economy is called the “what is” branch of the economy. Normative economics, on the other hand, is seen as the branch of economics that seeks to determine people`s attractiveness to various economic programs and conditions by asking what “should be” or what “should be.” A positive economy is objective and evidence-based if the statements are specific, descriptive and clearly measurable. These statements can be measured by hard evidence or historical cases. There are no cases of approval and disapproval in the positive economy. Economic statements that are prescriptive in nature cannot be examined or proven for factual values or legitimate cause and effect. Examples of normative economic statements include “women should receive higher school loans than men,” “workers should receive a larger share of capitalist profits,” and “workers should not pay for hospital care.” Prescriptive economic statements typically contain keywords such as “should” and “should.” An example of normative economics would be: “We should cut taxes in half to increase disposable income. On the other hand, a positive or objective economic observation would be: “Based on past data, significant tax cuts would help many people, but the government`s budget constraints make this option impossible. The example given is a normative economic statement because it reflects value judgments. This particular judgment assumes that disposable income must be increased. Which of the following statements is a normative statement in economics? Normative economics can be useful for establishing and generating new ideas from different perspectives, but it cannot be the only basis for decisions on important economic issues, as it does not adopt an objective point of view that focuses on facts, causes and effects. Common observations suggest that public policy discussions generally involve normative economic statements.

There is an even higher degree of disagreement in such discussions, as neither party can clearly prove their accuracy. Normative economics is a perspective on economics that reflects normative or ideologically prescriptive judgments about economic development, investment projects, statements, and scenarios. Normative economics aims to determine the desirability or absence of people for various programs, situations, and economic conditions by asking what should happen or what should be.