Question

. 1. Suppose you were to analyze the state and the economy at the moment. You say to your friends, “The economy has been growing more slowly in the last 10 years than it did in the previous 20 years. The government should cut taxes to stimulate the economy. “ what portion of that statement is “positive” and what portion of that statement is “normative”?

Answer 1

The first part of the declaration that is" the economy has actually been growing gradually in the last 10 years than it did in the previous 20 years" is the favorable declaration because of this declaration showing today and past condition of an economy. We can say that positive economists understand the way things are and why they are that way.
The second part of the declaration that is "the federal government should cut taxes to promote the economy" is the normative declaration. This statement includes an analysis that looks to understand what are the factors for the underperformance of the economy and what might be done to enhance the conditions of the economy. Here we are demonstrating that if the taxes get lower then the economy might perform well. We are going over the 'ought' to be the situation of an economy.