Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:
Identify the Normative statement:-
Options:

Govt has doubled the expenditure on education in this years budget

Recently RBI has increased repo rate to regulate inflation in economy

Rise in diesel prices causes rise in transportation cost 

Environmental regulation must be tough to protect the environment
 
Correct Answer:
Environmental regulation must be tough to protect the environment
 
Explanation:

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.