An economic study concludes that an investment tax credit would increase business investment next year.This is an example of:

Question

Quizplus · Accepted Answer

This is an example of positive analysis because it is based on empirical evidence and objective data to make a prediction about the likely impact of the tax credit on business investment. Positive analysis seeks to describe how the world actually works, rather than prescribe how it should work (normative analysis). Negative economic analysis refers to the study of "bad" outcomes, such as the costs and consequences of a particular policy. The fallacy of composition and generalizing from the whole to the individual are both logical fallacies and not relevant in this context.

An Economic Study Concludes That an Investment Tax Credit Would