Which of the following is an example of "Normative economics"?
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Equal income distribution can solve the problem of poverty in India
Normative economics deals with the "Opinions" of various economists on the economic issues prevailing in the country. Different economists put forwards different solutions of the problems. Whereas, positive economics deals with "Facts and figures".
The statement about equal income distribution solving the problem of poverty is a normative claim, as it reflects an opinion or recommendation about how economic conditions should be improved.