Which of the following scenarios best illustrates the use of normative analysis?
Understand the Problem
The question asks us to identify which scenario exemplifies normative analysis. Normative analysis involves subjective judgments about what should be, focusing on opinions and value judgments rather than factual statements. We need to determine which option presents a statement of opinion or a policy recommendation.
Answer
A policy recommendation, advocating for higher taxes on the wealthy to reduce income inequality, exemplifies normative analysis.
Normative analysis involves subjective statements about what should be, often based on values or opinions. An example would be a policy recommendation advocating for higher taxes on the wealthy to reduce income inequality.
Answer for screen readers
Normative analysis involves subjective statements about what should be, often based on values or opinions. An example would be a policy recommendation advocating for higher taxes on the wealthy to reduce income inequality.
More Information
Normative economics differs from positive economics, which deals with objective and testable statements.
Tips
A common mistake is confusing normative statements with positive statements, which are based on facts and can be tested.
Sources
- Positive vs. Normative Economics: What's the Difference? - investopedia.com
- Normative Economics: Definition, Characteristics, and Examples - investopedia.com
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