CA Foundation · Business Economics · Nature and Scope of Business Economics
Which of the following is a positive statement rather than a normative one?
The statement that quantity demanded fell when onion prices rose sharply is positive because it describes an observed fact that can be checked against data. The other statements use words like should and ought, expressing value judgments about what is desirable, so they are normative.
- AThe government should reduce GST on packaged foods to help households
- BFirms ought to pay higher wages to their workers
- CWhen the price of onions in India rose sharply, quantity demanded fellCorrect
- DBanks should lower interest rates on home loans
Explanation
A positive statement describes what is and can be tested against facts. The onion statement reports an observed relationship between price and quantity demanded. The other three use 'should' or 'ought to', which express value judgments and are normative.
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