Identify the Normative statement:-
Answer & explanation
Correct answer: option 4
In positive economic analysis, we study how the different mechanisms function, and in normative economics, we try to understand whether these mechanisms are desirable or not. Normative statement pronounces value judgments as these are opinions or suggestions whereas, positive statements are capable of empirical (statistical) verification as these are based on the facts. Thus, from the above statements it is clear that "Environmental regulation must be tough to protect the environment" is a Normative statement as it is an opinion or suggestion and not based on facts.