Every day economists make statements in the news based on

Question

Positive and Normative Analysis

Every day, economists make statements in the news based on positive and normative analysis. The general public then interprets these statements. This exercise will help reinforce the difference between positive and normative analysis using examples.

Tasks:

Categorize each of the following conclusions as being the result of positive or normative analysis:

1. Minimum wages create unemployment among young and unskilled workers.
2. If the price of a product in a market decreases, with other things being equal, the quantity demanded will increase.
3. A little bit of inflation is worse for society than a little bit of unemployment.
4. d. Income distribution in the United States is not equitable.
5. Health care subsidies will increase the consumption of health care.
6. If unemployment benefits were reduced, the country would be better off.