Normative Economics

In Normative Economics, statements are based on judgment, value and personal norms. Based on our own value and judgment, normative statements are the way things should be.

• Normative statement is a statement about how the world ought to be.
• This is an opinion
• Normative statements: claims that attempt to advise how the world should be

Some examples:

• The minimum wage should not be increased.
• Smoking is bad for people. The Government should raise sales tax for the consumption of cigarettes.
• The Government should increase the taxes on the tobacco industry in order to cut down on the consumption of cigarettes.

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