Difficulty: Easy

Average Score: 93%

What is an example of a positive economic statement

Rationale

Tax revenue was higher last year than it was two years ago.

This statement provides a factual observation that can be verified with data, making it a clear example of a positive economic statement. Positive statements are objective and can be tested or validated through evidence, unlike normative statements which express opinions or prescriptions.

A (Unemployment insurance needs to be increased to help displaced workers) YOUR ANSWER

This statement reflects a subjective opinion about what should be done regarding unemployment insurance. It suggests a course of action based on a belief about its potential benefits, thus classifying it as a normative economic statement rather than a positive one.

B (Tariffs should be imposed on steel so U.S. companies can compete globally) YOUR ANSWER

Similar to choice A, this statement expresses a recommendation about government policy. It implies a desire for tariffs to be enacted based on the anticipated impact on U.S. companies, which again makes it a normative statement rather than a statement of fact.

C (The government should implement a new healthcare system) YOUR ANSWER

This choice represents an opinion on what the government ought to do regarding healthcare. As it advocates for a specific action without presenting factual evidence to support it, it is classified as a normative statement, failing to meet the criteria of a positive economic statement.

Conclusion

Positive economic statements are grounded in factual evidence and can be empirically tested, such as the observation about tax revenue changes. In contrast, the other options suggest opinions or policy recommendations, making them normative statements. Understanding the distinction between positive and normative statements is crucial in economic analysis, as it helps clarify debates and discussions surrounding economic policies and their implications.

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