Positive Economics:
1. The positive economics is the study of ‘what was’ and ‘what is’ under the given set of circumstances. It is concerned with how the economy performs the basic functions of what to produce, how to produce and for whom to produce. It explains how the economy takes decisions about consumption, production and exchange of goods.
2. It deals with the scientific explanation of the working of the economy. It analyses every issue of economics from a positive perspective without passing any value judgments. It deals with the cause and effect relationship of economic variables.
Normative Economics:
1.The Normative economics studies ‘what ought to be’. It explains about ‘what should be and should not be done’. Here we try to understand that whether the mechanisms are desirable ornot. The normative economic statements are sometime called matters of op.nion or statements of value.
2. The advice given by various economists are mostly as per normative economics. In India, Economic Advisers who are appointed by the Government are responsible for advising the Prime Minister as to which of the policies are good and beneficial to the country’s economy and which are bad and detrimental on the whole.
Economics is both Positive and Normative:
1. But, Economics is both a positive and normative science. The study of economics involves both scientific investigation and policy analysis. Economists first use science to explain the world and understand how the economy works, later policies are explored for the economic development.
