ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The branch of economic analysis that describes the way economy actually works.
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The branch of economic analysis that makes prescriptions about the way economy should work.
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Either A or B
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None of the above
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Detailed explanation-1: -What Is Positive Economics? The term positive economics refers to the objective analysis in the study of economics. Most economists look at what has happened and what is currently happening in a given economy to form their basis of predictions for the future. This investigative process is positive economics.
Detailed explanation-2: -Positive economic analysis refers to the analysis in which we study what is or how an economic problem is solved by analysing various positive statements and mechanisms. These are factual statements and describe what was, what is and what would be.
Detailed explanation-3: -Macroeconomics is a branch of economics that studies how an overall economy-the markets, businesses, consumers, and governments-behave. Macroeconomics examines economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.
Detailed explanation-4: -Milton Friedman, in an influential 1953 essay, elaborated on the distinctions between positive and normative economics. He defined the aim of positive economics as developing theories that give “valid and meaningful” predictions which are precise, testable and in accordance with the available empirical evidence.