Positive and Normative Statements
Positive Economic Statement – A statement that can be proved or
disproved by reference to facts
Ex. : The U.S. unemployment rate is 5.1%
Normative Economic Statement – A statement that represents an
opinion, which cannot be proven or disproved
Ex. : The U.S. unemployment rate should be lower
Review: Determine whether the following statements are positive
or normative statements.
1. In a survey of 464 economists, only 6.5% disagreed with the
statement “A ceiling on rents reduces the quantity and quality
of housing available.”
2. “The distribution of income in the U.S. should be more
Care must be taken to distinguish between positive, which focus on
how the economy works, and normative statements, which
represent people’s opinions about the economy should work.