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In order to explain what positive and normative economics really are, you must first be able to define the meaning of both terms. 

Positive Economics 

  • refers to the analysis of facts and data to make scientific generalizations about economics phenomena. 
  • Basically, Positive Economics refers to statements made about economics that can be backed up by evidence

Normative Economics 

  • refers to value judgements made about economics situations as to defining how they ought to be. 
  • Basically, Positive Economics refers to statements made about economics that are based on opinion and not fact.

The defining difference between Positive and Normative Economics is that Positive statements are based on fact while normative statements are based on opinion. 

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