Question

Distinguish between positive economics and normative economics, with suitable examples.

Distinguish between positive economics and normative economics.

Answer 1

Basis	Positive economics	Normative economics
Definition	Positive Economics deals with factual situations, i.e., they describe the actual situation of what was, what is, and what would be.	Normative Economics deals with the ideal situations of what should be or what ought to be.
Personal Value Judgement	It does not involve any personal value judgement	It involves a personal value judgement
Nature	Objective and descriptive.	Subjective and prescriptive.
Approach	Establishes cause-and-effect relationships without value judgment.	Involves value judgments and policy recommendations.
Examples	“An increase in money supply leads to inflation.”	“The government should reduce inflation to protect the poor.”