Multiple Choice
Which of the following is a positive result of trade agreements such as NAFTA and the EU?
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0. Basic Principles of Economics
Positive and Normative Analysis
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Adopting socially responsible business practices is a form of ______.
A
descriptive analysis
B
normative analysis
C
empirical analysis
D
positive analysis
Verified step by step guidance1
Step 1: Understand the difference between the types of economic analysis. Positive analysis deals with objective, fact-based statements that can be tested or validated, such as "If the price of a good increases, demand decreases."
Step 2: Recognize that descriptive analysis involves simply describing economic phenomena without making judgments or predictions.
Step 3: Empirical analysis refers to the use of data and statistical methods to test hypotheses or theories in economics.
Step 4: Normative analysis involves value judgments and opinions about what ought to be done, focusing on what is considered desirable or ethical.
Step 5: Since adopting socially responsible business practices involves making a judgment about what businesses should do (a value-based decision), it falls under normative analysis.
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