Answer in Accounting for Henok #153793
______ Evaluates the desirability of alternative outcomes based on one’s value judgment about what Is good or what is bad
Economic analysis is classified into two: positive statements and normative statements.
Normative statements involve personal opinions. They are value judgements, and they cannot be proven to be right or wrong by looking at facts. This implies that normative statements are subjective and prescriptive in nature – they carry personal view points and recommendations about a desirable course of action.
Examples of normative statements include:
- Nations should completely shutdown international boarders to quickly combat covid-19 pandemic.
- Governments ought to impose labour-technology ratios in business organisations to prevent technical unemployment.
- Countries must increase provision of consumer goods against other goods to improve living standards and national welfare.
Positive statements, on the contrary, are factual statements that are weighed against facts to test whether they are true or false.