Answer to Question #320178 in Macroeconomics for isay

Question

Classify each of the following statements as positive or normative. Explain. a. Society faces a short-run trade-off between inflation and unemployment b. A reduction in the rate of money growth will reduce the rate of inflation. c. The Central Bank or Federal Reserve should reduce the rate of money growth. d. Society ought to require welfare recipients to look for jobs. e. Lower tax rates encourage more work and more saving.

Answer 1

A normative statement is usually used to refer what to what ought to be. What people perceive as the 'right' thing to be done in any situation. A positive statement on the other hand, makes a prediction about what is.

A) Positive statement.

B) Normative statement. This is because one is the statement assumed what to know what would happen if money supply is limited.

C) Normative statement

D) Normative statement. This statement is based on what is perceived as the right thing to be done by any responsible government to it's citizens.

E) Positive statement. This statement, though true at times, is not judgemental.