Which of the following statements best describes positive economics?

• A. It involves value judgments about what the economy should be like.
• B. It is concerned primarily with personal opinions and beliefs.
• C. It prescribes policies based on ethical considerations.
• D. It focuses on objective analysis and describes how the economy actually works.

Answer: (D)

Verified step by step guidance

1. Understand that positive economics is a branch of economics that deals with objective analysis and facts about the economy, without involving personal opinions or value judgments.
2. Recognize that positive economics aims to describe and explain economic phenomena as they are, using data and empirical evidence.
3. Contrast positive economics with normative economics, which involves value judgments and prescribes what the economy should be like based on ethical considerations.
4. Identify that statements involving personal opinions, beliefs, or ethical prescriptions fall under normative economics, not positive economics.
5. Conclude that the best description of positive economics is that it focuses on objective analysis and describes how the economy actually works.