1.1.2 Positive and normative economic statements
a) Distinction between positive and normative economic statements
Positive statements- statements that can be tested to be true or false by referring to the facts provided. Normative Statements- statements based on value judgement and cannot be tested to be true or false.
b) The role of value judgements in influencing economic decision making and policy
Value judgement has a major influence on decision making for consumers and producers due to their personal preference and beliefs in normative economics. Even with government, they may choose one policy over another because that is their preference on how to run an economy.