Normative analysis in economics:
A)makes prescriptions about how the economy should work.
B)involves model building based on assumptions that have been proven true.
C)is the branch of economic analysis that describes how the economy actually works.
D)is the same as positive externalities.

Question

Quizplus · Accepted Answer

Normative analysis in economics makes value judgments and prescriptions about how the economy should work, rather than simply describing how it functions (positive economics). It is concerned with determining the most efficient and equitable outcomes, rather than simply analyzing what is currently happening.

Normative Analysis in Economics