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Chapter 1: Q 13 (page 16)

Write a sentence contrasting positive and normative economic analysis.

Short Answer

Expert verified

Inflation will lead to falling in aggregate demand is a positive statement whereas the decrease in price levels will cause the aggregate demand to rise.

Step by step solution

01

Step 1. Positive and Normative Analysis.

Positive Analysis refers to descriptive facts and statements.

Normative Analysis refers to judgments about various economic policies.

02

Step 2. The statement.

Inflation will lead to falling in aggregate demand is a positive statement whereas the decrease in price levels will cause the aggregate demand to rise.

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