Question : Assertion: Normative economics involves subjective judgments about what the economy should be like.
Reason: Normative economics aims to prescribe how resources and wealth should be distributed in society.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion is true. Normative economics is a branch of economics that deals with value judgments and policy prescriptions. It involves making subjective assessments and expressing opinions about how the economy ought to be, based on personal values, social goals, and ethical considerations.
The reason provided is a correct explanation of the assertion. Normative economics goes beyond describing how the economy currently operates and delves into making recommendations about the desired distribution of resources, income, and wealth. It involves evaluating different policy options and suggesting how resources should be allocated to achieve specific economic and social goals.
Therefore, the correct answer is Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
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