Normative statements are
A not usually made by economists.
B claims about how the world should be.
C claims about how variables in the economy normally behave.
D pessimistic interpretations of the economy.
The correct answer and explanation is :
The correct answer is B: claims about how the world should be.
Explanation:
Normative statements are expressions that reflect personal opinions, values, or judgments about what ought to be. These statements often address questions of fairness, justice, or what is considered ideal or desirable in a given situation. In contrast to positive statements, which are objective and can be tested by facts or evidence, normative statements are subjective and based on individual or societal perspectives. They usually incorporate words like “should,” “ought,” or “better,” signaling that they are recommendations or opinions about how things should be rather than how they are.
In economics, normative statements often involve discussions about policies, ethics, and welfare. For example, a normative statement might be, “The government should increase the minimum wage to reduce poverty.” This reflects an opinion on what would be a preferable course of action for society. Normative economics is concerned with making judgments about the desirability of economic outcomes, such as whether income distribution is fair or whether government intervention is necessary.
On the other hand, positive economics deals with objective analysis, based on facts and data. Positive statements are testable and verifiable, such as, “Increasing the minimum wage leads to higher unemployment in certain sectors.” This type of statement can be proven true or false through evidence and analysis, unlike normative statements, which cannot be proven in the same way because they are based on subjective views.
Thus, normative statements play a key role in debates about economic policy, as they reflect differing views on what should be done to improve the economy, society, or individual well-being. They are central to discussions about ethics, government intervention, social welfare, and other policy-related issues.