[This is part of the series: The Complete Guide To Economics 101.]
What is normative economics?
Well, in general, talk about economics can be broken down into two categories: Positive Economics and Normative Economics.
While positive economics deals with the “is.”
Normative Economics is economic study centered around the reality of what “ought” or should be the case.
Examples of positive economics include:
- Corporate tax rates should be lower to encourage investment.
- Minimum-wage should be abolished to decrease unemployment among the unskilled.
- A basic income should be used to replace the current welfare system.
- The best use of property taxes is funding public schools.