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positive vs normative statements

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Identify whether the following statements are positive or normative economic statements, and explain why you categorized them in that way.
a. "The best way to improve the economic situation would be to decrease the unemployment rate by decreasing the interest rate."
b. "The government increased taxes in order to decrease the budget deficit and improve economic growth."
c. "The tax on business decreased production in some industries in the short run."
d. "The government should pursue a low-inflation policy by restraining the growth of the money supply."

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Solution Summary

This solution emphasizes differentiation between positive and normative statements involving unemployment, taxation, and inflation.

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a. "The best way to improve the economic situation would be to decrease the unemployment rate by decreasing the interest rate."

This is a normative statement, indicated by the fact that it is the speaker's opinion.

b. "The ...

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