The economic approach in which we try to understand whether given mechanisms are desirable or not is known as ______.

Normative Economics

The correct answer is Option (1) → Normative Economics

Normative Economics deals with value judgments and opinions about what the economy ought to be or should do. It focuses on whether certain economic mechanisms, policies, or outcomes are desirable or undesirable from a social or ethical point of view. For example, statements like “The government should reduce inequality” or “Subsidies for the poor must be increased” fall under normative economics because they express what ought to happen, not just what is happening.