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Class : 11
Unit : Economics


Explain the Concept of Positive and Normative Economics.

Ans : The concept of positive and normative economics are explained below: i) Economics as a Positive Science/Positive Economics Ans:- A positive science is that which studies the thing as they happen in It means it explains the real situation. Positive science only explains what is, what was, what will be. Economic is a positive science since it studies cause and effect relationship. For example, law of demand studies cause and effect relationship between price and demand for a particular commodity. The law states that when there is fall price for a particular commodity the demand for that commodity increases and vice versa. Economic like Adam smith, Robbin’s, Fries man, Boulding etc. have regarded economic as positive science. i) Some example of Positive economics are: ii) Nepal is a developing country. iii) Prices have been rising in Nepal. iv) Per capita income of Nepal is lower than that of India and China. v) Nepal is rich in water resources. vi) Nepal is dependent on imports. ii) Economic as a Normative Science/Normative Economics Ans:- A normative science is that which study the things as they should be. It is related to the criteria of what ought to be. Economic cannot be separated from normative expect. Normative economic deals with value judgment. It explains weather the thing is good or bad. It lays down policies and rules to achieve what is considered to be good. Thus, normative science may be called as applied science. For example, when we analyze the cause of poverty, economics becomes positive science. But if we discuss whether poverty is good or bad and what policies should be followed to remove poverty, economic is normative science. Economist like Marshall. Pigou, Fisher etc. have regarded economics as normative science. Some example of Normative Economics are: i) We should develop our country. ii) Government should control rising price in the market. iii) Nepal should not take loan from foreign countries. iv) Free education and healthy care should be given to the poor. v) Nepal should fully utilize its natural resources.
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