what is the difference between positive and normative economics? How c
QUESTION
what is the difference between positive and normative economics? How can knowledge of positive econmics be useful in normative economics?
Answer In the world of economics, it is important to understand the difference between positive and normative economics in order to lead to enhanced and better decision making. Positive economics also known as descriptive economics is based on actual facts and figures and it uses statistical measures in order to test its viability in the market. It can be either accepted or rejected in the economic world. However, normative economics also called policy economics is based on ideas and judgments as to how an ideal economy should be like. The¦
lity of normative economics cannot be judged as it is not based on facts. However, the knowledge of positive economics is useful in normative economic, as the person would be aware about the facts and figures before providing any judgment or opinion about a particular economic policy. The two economics are complementary in nature and is beneficial to the individual.
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