Which of the following claims is consistent with the views of mainstream economists regarding positive and normative analysis?

• A. Positive analysis is based solely on ethical considerations.
• B. Mainstream economists do not distinguish between positive and normative statements.
• C. Normative analysis is always objective and free from value judgments.
• D. Positive analysis describes what is, while normative analysis prescribes what ought to be.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the distinction between positive and normative analysis in economics. Positive analysis deals with objective statements that can be tested or verified, describing 'what is.' Normative analysis involves subjective judgments about what ought to be, incorporating ethical or value-based considerations.
2. Step 2: Evaluate the first claim: 'Positive analysis is based solely on ethical considerations.' Since positive analysis is about objective facts and cause-effect relationships, it does not rely on ethical considerations. Therefore, this claim is inconsistent with mainstream economic views.
3. Step 3: Evaluate the second claim: 'Mainstream economists do not distinguish between positive and normative statements.' In fact, mainstream economists clearly distinguish these two types of analysis to separate objective facts from value judgments, so this claim is incorrect.
4. Step 4: Evaluate the third claim: 'Normative analysis is always objective and free from value judgments.' Normative analysis inherently involves value judgments and subjective opinions about what should happen, so this claim contradicts the standard understanding.
5. Step 5: Conclude that the correct claim consistent with mainstream economics is: 'Positive analysis describes what is, while normative analysis prescribes what ought to be.' This captures the essential difference between the two types of economic analysis.