The Chairman of the Council of Economic Advisors tells the President, "I recommend raising these taxes, since the resulting half percentage point increase in unemployment is a fair price to pay for a needed two percentage point decrease in inflation." This is an example of

Question

Quizplus · Accepted Answer

The statement is normative because it is recommending a policy based on a value judgement about the tradeoff between inflation and unemployment. It is not based on purely objective, positive economic analysis.

The Chairman of the Council of Economic Advisors Tells the President