Study Guide Survey of Economics Economics 211 Chs

I. NORMATIVE vs. POSITIVE ECONOMICS

TABLE 1

Normative and Positive Theory

Normative Positive

1. Deals with what should be (in a moral or ethical sense), deals with values. Deals with what is, descriptive and predictive, deals with facts.

2. Statements about what ought to be or what a person, organization, or nation should do. Statements are of a descriptive or predictive nature.

3. Results depend upon ethical values, cannot be shown to be correct or incorrect. Propositions can be tested by an appeal to facts, can be falsified.

4. Substantial disagreement about normative economics. Substantial agreement about positive economics.

                                                              
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	Normative	Positive
1.	Deals with what should be (in a moral or ethical sense), deals with values.	Deals with what is, descriptive and predictive, deals with facts.
2.	Statements about what ought to be or what a person, organization, or nation should do.	Statements are of a descriptive or predictive nature.
3.	Results depend upon ethical values, cannot be shown to be correct or incorrect.	Propositions can be tested by an appeal to facts, can be falsified.
4.	Substantial disagreement about normative economics.	Substantial agreement about positive economics.