馃攳
Positive Economics vs Normative Economics | Know the Top Differences! - YouTube
Channel: WallStreetMojo
[10]
hello everyone welcome to the channel of
to wallstreetmojo to know more about
[15]
this video positive economics vs. normal
economics watch the video till the end
[20]
and also if you're new to this channel
then you can subscribe us by clicking
[23]
the bell ican and that's given below
welcome everyone and today we have a
[29]
fantastic topic that is positive
economics versus normative economics so
[35]
what we are going to do let me just give
you a short synopsis well we going to
[40]
understand a difference between what
exactly positive economics is all about
[44]
what normative economics is we'll be
learning with the help of some of the
[49]
infographics the differences may will be
like sort of meaning what exactly both
[55]
things are all about the nature of the
branch the type of the argument that is
[59]
going behind this the merit of the
testing or probably you know what's
[63]
needed because of the same and what this
whole thing are the facts that are based
[69]
on so we are going to learn the
differences and the most important thing
[74]
is that you know key differences which
we are going to learn at the same time
[77]
so let's begin with our topic for today
first and the foremost thing you need to
[83]
understand guy is that positive
economics talks when when you whenever
[87]
you have both the things at the same
time economics is both is a science and
[94]
art remember this thing so and it's not
limited to facts or some fictions it is
[102]
combination of both now positive
economics talks about things that are
[106]
they something that is already there
it's facts now they can be verifiable in
[112]
this particular scenario so you can
prove it or probabilities prove it also
[115]
and you can test it so you can find out
whether these statements are mentioned
[119]
under positive economics are true of a
very untrue but normative economics is
[124]
what we call as fiction so they are an
facts rather they are opinions opinions
[130]
of what of economists
who tells us what they think and it can
[135]
be probably a true thing okay it can be
their facts so they can be true offs for
[144]
some and false for some and these
statements mentioned under the normative
[149]
economics aren't verifiable they aren't
verifiable remember this thing and they
[155]
can be tested either at the same time so
you may think why then there are two
[160]
level two divisions of economics and if
normative economics does not talk about
[165]
facts why should it exists as a division
of economics well here are some of the
[173]
differences that we will talk but before
that to make the policies of the
[177]
business or of any country we need both
positive economics and nor mattic
[184]
economics and we need to know which are
facts and then we should use our
[189]
judgment to form the policies because
that's gonna help individual and the
[194]
society at large so in this tutorial we
will talk about both the comparative
[199]
analysis which is between positive
economics and the normative economics
[203]
right so let's begin
as you start positive versus normattics
[208]
economics first thing that we are going
to learn is the meaning positive
[212]
economic concentrates on what are there
I told you what are there is something
[216]
that is facts and something that is
verifiable is what is positive economics
[222]
normative it depicts a picture so it is
based on some assumptions some criterias
[230]
some structure and it depicts a picture
of what it should be
[236]
we're trying to understand the forecast
the opinions the prescriptions of the
[241]
economists and experts so it's like
probably you can say that it is more
[247]
sort of protection based on some of the
analysis with some assumptions which are
[254]
involved that is normative economics what
is it what it's all about positive
[259]
economic talks about the cause and the
effect
[262]
what is the cause behind it and what
the consequences what are the effects so
[268]
reason and consequences relationship is
what positive economics talks about when
[275]
you talk about normative economics it
talks about the opinions that is this is
[282]
something that I'm going for this is the
judgment they will throw something a
[289]
statement so there's no cause-and-effect
relationship there's more sort of in an
[296]
opinion that is given based on some
assumptions which they will try and
[300]
express that the nature of the branch
the nature of positive economics is
[304]
factual which you understood and
descriptive verifiable the nature of
[309]
normative economics is prescriptive
cannot be exact
[314]
another type of the argument behind the
type of the argument behind positive
[320]
economics is what objective and the type
of the argument behind normative
[324]
economics is subjective
what is the merit of testing statement
[330]
and the positive economics can be tested
and you can give things as right or
[336]
wrong can be found statement and
normative economics can be tested or can
[342]
be verified we know it now why probably
when is needed need is of what positive
[349]
economics points out the thing as it's
so that the judgment can be passed based
[354]
on the facts judgment comes from the
facts but in case of normative they pass
[361]
the opinion judgment opinion okay
opinions on facts presented in the
[367]
positive economics so whatever opinions
are given here based on the that facts
[375]
it is presented you're in normative
facts reality this is values I hope you
[384]
have got a fantastic idea regarding how
positive versus normative
[388]
economics so let me make you understand
what are the key differences here well
[395]
the biggest difference between positive
economics and normative
[399]
economics is the former one is based on
I'm talking about here positive and here
[405]
normative noted so the biggest
difference between positive economics
[410]
and normative economics is the former
one here it is based on facts normative
[417]
economics is basically based on values
judgments and opinions right here the
[428]
statement and the positive economics can
be tested or it is verifiable that means
[437]
the statements can be the true or can be
false so the statement is normative
[441]
economics on the other hand our opinions
and you can say they are the
[447]
recommendations ok yes right opinions or
recommendations which cannot be verified
[457]
until they are acted upon first now the
statement and the positive economics is
[462]
more sort of objective in nature and
over here it is more subjective in
[469]
nature due to the fact of being
assumption involved well the statement
[475]
and the positive economics focuses more
on what it focuses more on cause and
[486]
effect relationship right and normative
on the other hand concentrates what can
[495]
work and why positive and normative
economics both are important because one
[503]
another
doesn't make without one another it
[507]
doesn't make any sense right so well as
mentioned in the synopsis we understood
[514]
the meaning what exactly it is all about
the nature the type the merit of testing
[522]
why it is needed and it is based on what
so now we reach to the conclusion of
[530]
this particular topic we can see that
positive economics and normative
[535]
economics is not important only to
policymakers or or you can see planners
[545]
they are equally important for anyone
who is trying to find out the solution
[549]
based on fact so if a school sees the
student of the school have been
[554]
performing lower than the average for
the last couple of years they can call a
[559]
per meeting talk things out jot down
ideas and can find the best alternative
[565]
which can help the student get better
marks so in this simple scenario the
[571]
combination of the fact and the
solutions can be easily be traced down
[576]
from the concept of positive economics
and normally these two types of
[581]
economics are so very what we call as
practical that you can apply them in any
[589]
way anything means anything from
business to politics from sports to
[593]
social reforms from policymaking to
becoming wealthy so all you need to
[598]
understand is to apply these because
they are the combination of both
[602]
positive and normative economics well I
hope if you have learned and enjoyed
[611]
watching this video then please like
comment on this video and subscribe to
[616]
our channel for all the latest updates
thank you everyone once again
[620]
cheers
Most Recent Videos:
You can go back to the homepage right here: Homepage