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Distinguish Between Positive Economics and Normative Economics, with Suitable Examples. - Economics

Distinguish Between

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

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Solution

The difference between positive economics and normative economics is given as follows:

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 the personal value judgement
Examples The rate of inflation at present is 4% What should an ideal rate of inflation be?
Concept: Positive and Normative Economics
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