The correct answer is Option 1: Normative economics
- Normative economics deals with opinions, value judgments, and what "ought to be" in an economy. It is subjective and based on personal beliefs rather than objective data.
- It suggests policies or economic changes based on ethical considerations or social welfare.
- Example: "The government should increase taxes on the wealthy to reduce income inequality."
- Different economists may offer different opinions on the solution to an economic problem.
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