The normative economic analysis deals with the variablesa) As they are...
Normative economic analysis refers to the analysis in which we study whether a particular mechanism is desirable or not. In this analysis, we study what ought to be the desired situation or in what ways the economic problems should be solved. In other words, it is concerned with what should be and what should not be, and what is desirable and what is not?
View all questions of this test
The normative economic analysis deals with the variablesa) As they are...
Normative economic analysis refers to the branch of economics that deals with how things should be, or how economic outcomes ought to be. It involves making value judgments and recommendations based on subjective opinions and beliefs about what is desirable or optimal. In contrast, positive economic analysis focuses on describing and explaining economic phenomena as they are, without making judgments about whether they are good or bad.
Normative economic analysis is concerned with the evaluation of economic policies, decisions, and outcomes in terms of their desirability or social welfare. It aims to determine what should be done to achieve certain goals or objectives, such as maximizing efficiency, promoting equity, or achieving economic growth. It involves making subjective judgments about the desirability of different outcomes and weighing the costs and benefits of various alternatives.
Key Points
- Normative economic analysis deals with how things should be or how economic outcomes ought to be.
- It involves making value judgments and recommendations based on subjective opinions and beliefs about what is desirable or optimal.
- Normative analysis is concerned with evaluating economic policies, decisions, and outcomes in terms of their desirability or social welfare.
- It aims to determine what should be done to achieve certain goals or objectives, such as maximizing efficiency, promoting equity, or achieving economic growth.
- Normative analysis involves making subjective judgments about the desirability of different outcomes and weighing the costs and benefits of various alternatives.
In conclusion, the correct answer is option 'B' - normative economic analysis deals with economic variables as they should be. It involves making value judgments and recommendations based on subjective opinions and beliefs about what is desirable or optimal.
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.