POSITIVE AND NORMATIVE ECONOMICS Positive economics deals with what is with how the economy works‚ plain and simple. If we lower income tax rates in the United States next year‚ will the economy grow faster? If so‚ by how much? And what effect will this have on total employment? These are all positive economic questions. We may disagree about the answers‚ but we can all agree that the correct answers to these questions do exist— we just have to find them. Normative economics concerns itself with
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|Definition of ’Positive Economics’ | |The study of economics based on objective analysis. Most economists today focus on positive economic analysis‚ which uses what is and what has been occurring in | |an economy as the basis for any statements about the future. Positive economics stands in contrast to normative economics‚ which uses value judgments. | |Investopedia
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1/3/14 What is Positive Economics | What is Normative Economics Positive economics is economics that does not apply objectives to what an economy should be doing or what it “ought to be” doing. It ill describe equilibrium levels at certain prices and quantities but give no opinion on whether that is an appropriate price of quantity‚ It will examine the quantity theory of money and the interest rate while never stating whether an interest rate is good or bad. The “free market” is a system
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decisions is difficult and part of the difficulty is that we do not live in a vacuum. Making moral decisions are complex and are connected to different contexts. You are being asked to do an ethical analysis as compared to a political‚ religious‚ or economic one. Your research topic or case study focuses on a moral dilemma and probably has several different proposals or solutions to your dilemma.. For our purposes‚ it is not so important which moral judgment or moral rule you draw‚ (Discovery essay)
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Normative Theories Application Normative ethical theories can generally be divided into three types: teleological‚ deontological‚ and virtue ethics. The first two types are considered as action-based theories because they focus entirely upon the actions which a person performs. The last one focuses on training decision maker’s character. Teleological theories are characterized focus primarily on the consequences. In order to make the correct ethical decisions‚ decision-maker has to evaluate
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NORMATIVE ETHICAL THEORIES Objective • Discuss the normative ethical theories L2: Normative Ethical Theories Beliefs about how people should behave can be classified into at least 2 major categories: Teleological theories (Consequentialism) Right actions are those that produce the most or optimize the consequences of one’s choices. Behaviour is ‘ethical’ if it results in desirable behaviour 1. 2. 3. 4. Ethical egoism Ethical elitism Ethical parochialism Ethical universalism Deontological theories
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Normative theory and whistle-blowing Introduction Whistle-blowing in this context is the act‚ for an employee‚ disclosing what he believes to be an unethical or illegal behaviour to higher management (internal whistle-blowing) or to an external authority or the public (external whistle-blowing). Examples of unethical acts include sexual harassment and racial discrimination at work while illegal act include the accounting fraud by the Arthur-Andersen accountants for Enron (Sims & Brinkmann 2003)
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What is normative analysis? Value-based statements‚ on the other hand‚ that are prescriptive in nature are referred to as normative statements. Normative statement as a support use factual evidences‚ however they are not factual on their own. Rather‚ they include the underlying morals‚ standards and opinions of the people making such statements. The process‚ through which people make recommendations for taking a specific standpoint or acting in a specific way‚ is known as normative analysis.
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Positive and normative statements The importance of detecting bias in arguments Whenever you are reading articles on current affairs it is important to be able to distinguish between objective and subjective statements. Often‚ the person writing an article has a particular argument to make and will include subjective statements about what ought to be or what should be happening. Their articles carry value judgements; they are trying to persuade you of the particular merits or demerits of
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Positive Accounting Positive economic theory and accounting practices are objective and based on fact. Positive accounting focuses on analyzing the economic statistics and data at hand‚ and deriving conclusions based on those figures. For example‚ if corporate growth allows a company to increase shareholder dividends over previous dividend payments‚ positive accounting theory would conclude that corporate growth causes a rise in stockholder dividends. Most bookkeeping and data collection involved
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