CA Foundation · Business Economics · Nature and Scope of Business Economics
Which of the following statements is a positive statement as understood in Business Economics?
The statement that a 10% rise in cement price reduces quantity demanded by 4% is positive, because it describes a testable relationship in facts. The others use 'should', 'ought' or 'must', expressing value judgements, which makes them normative statements.
- AThe Government should reduce GST on packaged foods to help the poor
- BCompanies ought to pay higher wages to their workers
- CIf the price of cement rises by 10%, the quantity demanded in the market falls by 4% in the short runCorrect
- DThe RBI must lower interest rates to make the economy fairer
Explanation
A positive statement describes what is, was or will be and can be tested against data. The cement statement gives a measurable relation between price and quantity. The other three contain words like 'should', 'ought' and 'must', which are value judgements and therefore normative.
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