Chapter_2__21_The_Power_of_Trade_-_Econ - Chapter 21 \u25cf Positive and normative statements \u25cb A normative statement expresses a value judgement about

Chapter_2__21_The_Power_of_Trade_-_Econ - Chapter 21 ●...

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Chapter 21 Positive and normative statements A normative statement expresses a value judgement about whether a solution is subjectively desirable or undesirable Government should focus on producing public goods and let markets produce private goods A positive statement is a statement that is in principle testable or that can be disproven. It does not express a value judgment. Can gather data Governments generally focus on producing public goods and let markets produce private goods. Positive economics is describing, explaining or predicting economic events Normative economics involves recommendations or arguments about what public policy should or should not be Chapter 2 The Power of Trade Key Ideas Absolute Advantage Comparative Advantage Comparative advantage plays a critical role in determining patterns of international trade Specialization and trade between two countries raises productivity and income in both countries
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