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Normative and positive statements | Basic economics concepts | AP Macroeconomics | Khan Academy - YouTube
Channel: Khan Academy
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what we're going to do in this video is
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discuss the difference between normative
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statements and positive statements and
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you'll see these words used usually in
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an economic context sometimes a
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philosophical one a normative statement
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is one that really is a matter of
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opinion maybe a matter of ethics
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something that someone thinks is how the
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world should be
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while a positive statement is something
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that it doesn't necessarily have to be
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true but it's something that can be
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tested
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so what we're going to do in this video
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is look at a bunch of statements around
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economics and think about whether they
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would be classified as normative
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statements things that are opinions that
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are a matter of ethics or morals or
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whether they are positive statements
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things that can be tested
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so let's look at our first statement
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this says paying people who aren't
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working even though they could work is
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wrong and unfair
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so regardless of whether or not you
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agree with this statement is it a
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normative statement or positive
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statement
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well the fact that someone's saying it's
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wrong and it's unfair this is pretty
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clearly a matter of opinion so this
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would be a normative statement you can't
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test whether this is wrong or unfair you
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would just have to believe that it is
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wrong and unfair
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now let's look at another statement
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programs like welfare reduce the
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incentive for people to work
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is this a normative statement or a
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positive statement
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well it might feel a little normative it
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might feel like this is an opinion but
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it actually can be tested you could
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institute some welfare program on some
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small scale and compare it to a
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comparable place where there isn't a
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welfare program and see what it does for
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incentives to work you survey people you
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see how many people work in one
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situation or another it might be a false
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statement it might be a true statement
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but either way it actually can be tested
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so this would be a positive statement so
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i'll put it
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in this category
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right over here this is a positive
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positive statement
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all right let's look at another one
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this says
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raising taxes
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on the wealthy to pay for government
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programs grows the economy is that a
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normative statement or a positive
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statement
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well once again
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this can be tested it might be true it
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might be false maybe your test is even
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inconclusive but it can be tested you
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could try to run a simulation you could
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look at case studies of countries that
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did do this and see what happens to
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their economy versus ones that didn't do
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it and so this is even though it looks
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like something that someone who favors
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raising taxes on the wealthy maybe out
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of fairness arguments something that
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they would say
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this statement itself is not normative
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the statement can be tested so this
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is
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a positive statement
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a good giveaway for normative statement
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if it said something like it is fair to
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raise taxes on the wealthy to pay for
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government programs that would have been
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a normative statement or we should do
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this that would have been a normative
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statement but here this is something
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that's testable now the next statement
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raising taxes on the wealthy slows
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economic growth
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is that normative statement or a
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positive statement
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well once again this might feel like
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someone who is against raising taxes who
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think it's unfair to raise taxes on the
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wealthy something that they would say
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but the statement itself can actually be
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tested so this is also a positive
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statement even though in some ways it's
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the opposite statement as the one that
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we just did
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because once again
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we could look at countries that did this
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in countries that didn't do this we
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could run a computer simulation to try
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to understand whether the statement is
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true now let's do one last statement
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this says
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the government
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should raise taxes on the wealthy to pay
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for helping the poor is this normative
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or positive
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well in this situation the word should
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is a pretty big giveaway should or it's
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fair unfair this is someone's opinion
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it's not something that's testable you
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can't test whether this statement is
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right or wrong it's based on do you
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believe ethically morally
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that this is true and so this is a
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normative statement
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so i'll put it
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in the
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normative column
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so big picture these words normative and
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positive these are fancy words but all
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they mean is normative is a matter of
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morals or opinion and not can't really
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be tested while a positive statement
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whether they're right or wrong or
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whether you agree or disagree with them
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these are things that in theory could be
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tested
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