Here is an example of a positive economic witness: «State-provided health care increases public spending.» This statement is based on facts and has no value judgment. Its validity can be demonstrated (or refuted) by examining the health expenditures in which governments provide health care. 2) A positive statement is the one that says A) what is and should be. B) what is desirable. C) what is, was or will be. D) no negative numbers. E) what should be, but is not. Economists carry out two different but related activities. They are in the process of researching economic issues, for example.

B the determination of cause and effect. For example, why did unemployment increase rapidly in 2008 and 2009? Economists also make policy recommendations. What should the federal government do, for example, to cope with rising unemployment? Positive statements (and positive considerations in general) are objective. As such, they can be tested. These can be categorized into two categories. One of them is an assumption such as «unemployment is caused by a decline in GDP.» This can be empirically tested by analysing data on unemployment and GDP. The other category is a factual statement, such as «It`s raining» or «Microsoft is the largest manufacturer of computer systems in the world.» Like assumptions, such claims can be proven to be good or false. A factual assertion or hypothesis is a positive statement. Also note that positive statements may be false, but as long as they are testable, they are positive. A clear understanding of the difference between the positive and normative economy can lead to better policy development if policies are based on a balanced mix of facts (positive economy) and opinions (normative economy). Nevertheless, many policies on issues ranging from international trade to the protection of well-being are based, at least in part, on the normative economy.

The normative economy is subjective and value-based and comes from personal perspectives, feelings or opinions involved in the decision-making process. Normative economic declarations are rigid and normative. They often seem political or authoritarian, which is why this sector is also called «what should be» or «what should be» economy. Watch this short video to check the differences between positive and normative analysis. Although people are often divided on positive statements, these differences can ultimately be resolved through investigations. However, there is another category of allegations for which investigations can never resolve differences. A normative statement is a value judgment.