With which of the following statements would most economists agree regarding the distinction between positive and normative analysis?

• A. Most economic policy debates are purely positive in nature.
• B. Positive analysis describes what is, while normative analysis prescribes what ought to be.
• C. Normative analysis is always objective and free from value judgments.
• D. Positive analysis is concerned with ethical considerations.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the definitions of positive and normative analysis in economics. Positive analysis deals with objective statements that can be tested or validated, describing 'what is'. Normative analysis involves subjective statements that express opinions or value judgments about 'what ought to be'.
2. Step 2: Evaluate each statement in the problem by comparing it to these definitions. For example, check if the statement about economic policy debates being purely positive aligns with the idea that positive analysis is objective and descriptive.
3. Step 3: Identify which statement correctly captures the essence of the distinction between positive and normative analysis. The key is recognizing that positive analysis is descriptive and fact-based, while normative analysis is prescriptive and value-based.
4. Step 4: Recognize that statements claiming normative analysis is always objective or that positive analysis is concerned with ethical considerations contradict the standard definitions, so these are unlikely to be agreed upon by most economists.
5. Step 5: Conclude that the statement 'Positive analysis describes what is, while normative analysis prescribes what ought to be' best reflects the consensus among economists regarding the distinction between positive and normative analysis.