2 points Are the following statements TRUE or FALSE Explain

(2 points) Are the following statements TRUE or FALSE? Explain your answers. a) \"We should lower taxes to encourage more work\" is a positive statement. b) The system of public education generates greater benefits to society than the cost of

Solution

a) \"We should lower taxes to encourage more work\" is a positive statement.

This is a false statement. Positive statement is related to the analysis which is limited to cause and effect relationship. It does not give any value judgment.

The above statement is giving a value judgment. Hence, it is a normative statement.

b) \"The system of public education in this country generates greater benefits to society than the cost of running the system\" is a normative statement.

This is a false statement. Since the statement is just establishing the cause and effect relationship and does not gives any value judgment, it is a positive statement.

Normative statement aims at examining real economic events from the moral and ethical point of view. It is used to judge whether the economic events are desirable or not.