Question : Which of the following statements is an example of positive economics?
Option 1: The government should regulate the banking sector to prevent financial crises.
Option 2: Tax cuts for corporations will stimulate economic growth.
Option 3: Wealth redistribution is necessary for a just society.
Option 4: Economic efficiency should be prioritized over equity.
Correct Answer: Tax cuts for corporations will stimulate economic growth.
Solution : The correct answer is (b) Tax cuts for corporations will stimulate economic growth.
Tax cuts for corporations will stimulate economic growth is an example of positive economics because it presents a cause-and-effect relationship based on empirical evidence and economic analysis. It suggests that tax cuts for corporations will lead to an increase in economic growth. Positive economics focuses on analyzing economic data and facts to provide objective analysis and understanding of how the economy functions.
