Question : Statement 1: Positive economics deals with objective analysis and focuses on explaining economic phenomena as they are.
Statement 2: Normative economics involves subjective judgments and aims to prescribe what economic policies should be implemented.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Correct Answer: Both statements 1 and 2 are true.
Solution : The correct answer is (c) Both statements 1 and 2 are true.
Statement 1 is true: Positive economics deals with objective analysis and aims to explain economic phenomena as they are, without making value judgments or prescribing what should be.
Statement 2 is also true: Normative economics involves subjective judgments and seeks to prescribe what economic policies should be implemented based on value judgments about what is desirable or optimal.
Therefore, both statements are true and accurately describe the distinction between positive and normative economics.
