Which of the following is a statement of positive economics?
A) An increase in tax rates will reduce unemployment.
B) We should increase pension payments to the elderly.
C) Teenage unemployment should be reduced.
D) New tax laws are needed to help the poor.

Question

Quizplus · Accepted Answer

A is a statement of positive economics, as it proposes a cause-and-effect relationship between two economic variables (tax rates and unemployment) that can be tested and verified through empirical evidence. B, C, and D are normative statements, as they express opinions about what should or should not be done in the economy, rather than describing how the economy actually works.

Which of the Following Is a Statement of Positive Economics