The science that deals with the manufacturing, allocation and consumption of products or services is called economics.
It is concerned with how different people, firms or nations choose resources and use them appropriately to cater to their requirements.
It is also the study as to how resources can be used optimally to render maximum positive results.
Economics is divided into two parts, macroeconomics that deals with the total economy and its behavior and microeconomics that concentrates on the consumers. Students can get more details on economics by searching for links like normative economics homework help online.
Normative economics
An economics perspective that provides general opinions or reactions towards economic assignments, statements and conditions is termed as normative economics. It is different from positive economics as it is concerned with rationalized judgments and theoretical conditions and financial statements that project on what things should be instead of the causes and their results of different conditions.
Normative economics is more of a subjective approach that gives a predictive judgment about what an economic activity could result to in case any change occurs in a public policy. Learners can log on to links like normative economics homework help online to get more information on normative economics.
Simplifying normative economics
Normative economics tries to show the desirability of people towards several programs or situations related to economy by asking simple questions like what outcomes could be or what the strategy should be. It is more of a predictive opinion rather than an analytical report.
Positive economics gives a description of economic conditions whereas, normative economics prescribes that aim to solve economic issues. More knowledge on the topic can be obtained from online search of links like normative economics homework help.
Positive economics
The study of positive economics involves objective analysis. This is more predominant among analysts because it uses actual data for analysis and is thus more objective in its approach. This utilizes data about economic conditions that are prevailing or have been occurring in the past to analyze the possibility of future endeavors.
Simplifying positive economics
Positive economics is completely different from normative economics as it stresses on the effects, causes and factors that influence the development of theories on economics. It focuses on what is the situation rather than what should be the situation.
Main features of normative economics
The general features of normative economics involves the following –
- Judgment
- Idealizing reality
- Predictive
- Subjective
- Opinion
- Recommending aspects that might give way to performance that is more accurate
- Applying concepts related to economy
What influences normative economics?
People who work in sectors that involve uncertainty require normative economics. Examples could be when investors predict economic decisions when predictors study risks involves in when changes occur in certain sectors.
Reason for existence of normative economics
There is always uncertainty involved in anything that is about to happen in the future. Future is always unpredictable; there are various aspects that participate for the growth and development of companies which are completely uncertain.
Normative economics thus exists to tackle such situations as it is utilized to predict certain future results that come up due to changes in numerous factors. More reasons for existence of normative economics can be obtained by searching topics like normative economics homework help online.
Effects of normative economics
Normative economics finds great use in reducing the unpredictability of future. The different judgments regarding several conditions and procedures to be followed for both micro and macro-economical variations help a lot in taking careful steps while making important business decisions. Although there is a possibility of predicting results that can come up in future yet at times this becomes little subjective as the predictions made are not based on actual data, thus the hundred percent authenticity of the predictions is a question.
Comparison between normative and positive economics
There are notable differences between normative and positive economics that are as follows –
- Normative economics is that science which finds its base in opinions, judgments and predictions whereas positive economics is completely opposite as it depends on actual facts that has been acquired from the past data.
- Normative economics provides judgment and prediction values, on the contrary, positive economics shows the causes and resultant relation between various data.
- Normative economics has a nature of prescription, it is predictive in nature. Positive economics on the other hand is more descriptive and objective in nature.
- Normative economics provides solutions for economic problems whereas positive economics describes the economic problems with clarity.
- Normative economics has a subjective approach and on the other hand, positive economics has an objective approach.
- The judgments that are made by normative economics cannot be verified as they do not have any reference data whereas, positive economics is fully based on data and thus can be easily tested or verified with the available facts.
- Normative economics describes what things should be whereas positive economic describes what actually is.
Although positive economics has a rationalized approach and seems to be useful in various aspects of business, the importance of normative economics cannot be neglected. Normative economics is very useful when it come to predictions of aspect sin business that do not have clear data, in such cases it can help to predict consequences of upcoming scenario that can actually help in taking business decisions.
Students who find normative economics interesting and want to know more about the same can easily search for links like normative economics homework help online and get the required information.