What is Normative Economics?
- Normative economics is a branch of economics that emphasizes the hypothetical, or what we should do in situations.
- It is developed on judgment and prospection as opposed to calculation.
How Do I Remember it?
- It is normal to assume conclusions through judgment and opinion. Most people use normative economics everyday because not everyone will refer to statistics and facts within every scenario, making it a normal human instinct.
Real World Example
- It is wrong for educational institutions to discriminate against certain races, they should enact a different method of judgment for admissions.
- This analysis linking to an economic change is based within judgment and opinion, making it a normative economic approach.
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