Economic statements that are prescriptive in nature cannot be examined or proven for factual values or legitimate cause and effect. Examples of normative economic statements include “women should receive higher school loans than men,” “workers should receive a larger share of capitalist profits,” and “workers should not pay for hospital care.” Prescriptive economic statements typically contain keywords such as “should” and “should.” Economic statements from a positive economic perspective can be broken down into determinable and observable facts that can be examined and tested. Because of this characteristic, economists and analysts often practice their profession under the positive economic aspect. The positive economy, the measurable perspective, helps policymakers and other government and economic agencies decide on important issues that affect specific policies under the direction of evidence-based outcomes. Positive statements (and positive thinking in general) are objective. As such, they can be tested. These can be divided into two categories. One is an assumption such as “unemployment is caused by a decline in GDP.” This can be verified empirically by analysing unemployment and GDP data. The other category is a statement of fact such as “It`s raining” or “Microsoft is the world`s largest computer operating system manufacturer.” Like assumptions, such claims can be shown to be right or wrong. A statement of fact or hypothesis is a positive statement. Also note that positive statements may be false, but as long as they are verifiable, they are positive. Some prescriptive statements can be found in online articles. Some of them come from expert opinions on the economy and can, contrary to what you believe.

In other places, you will find an expert who is good at providing economic data. He explained in detail the causes of the current economic conditions. Although people often disagree on positive statements, these disagreements can ultimately be resolved through an investigation. However, there is another category of claims for which an investigation can never resolve disputes. A normative statement is a statement that makes a value judgment. Such a judgment is the opinion of the speaker; No one can “prove” that the statement is correct or not. Examples of normative statements in business include: It is not uncommon for people to present an argument as positive to make it more compelling to an audience, when in fact it contains normative elements. Opinion pieces in newspapers or other media are good examples. Therefore, it is important to be able to distinguish between positive and normative demands. Normative economics is a perspective on economics that reflects normative or ideologically prescriptive judgments about economic development, investment projects, statements, and scenarios. Normative economics aims to determine the desirability or absence of people for various programs, situations, and economic conditions by asking what should happen or what should be.

Therefore, normative statements generally represent an opinion-based analysis of what is considered desirable. For example, the assertion that the government should aim for economic growth of x% or inflation of y per cent could be considered prescriptive. Economists are involved in two different but related activities. You research economic issues, for example to determine cause and effect. Why, for example, did unemployment rise rapidly in 2008 and 2009? Economists also make policy recommendations. For example, what should the federal government do in response to rising unemployment? Unlike positive statements, which depend on objective analysis of the data, normative statements are more about “what should be” than facts or causal relationships. Normative economics expresses ideological judgments and ideal states that relate to a state, event, action, or behavior. Normative statements and positive statements often appear in economics textbooks or in the media. The two statements are contradictory.

Prescriptive statements are more subjective, while positive statements are objective. The latter usually depends on theory, data, and cause-and-effect relationships to explain certain conditions. Prescriptive statements generally represent an opinion-based analysis of what is considered desirable. You said, for example, that Indonesia`s economic growth is expected to reach 6%. It is prescriptive because it is based on your subjective opinion. Normative statements are statements based on opinions about what should happen. They are subjective rather than objective because they involve a value judgment about what is right and what is wrong. Unlike positive economics, which relies on objective analysis of data, normative economics is heavily interested in value judgments and statements about “what should be,” rather than facts based on statements of cause and effect.