Distinguish between a positive statement and a normative ...

[bobthebuilder]

Distinguish between a positive statement and a normative statement and provide examples.
 
  What will be an ideal response?

Question 2

All of the following are characteristics of stock except
 
  A) stock does not represent a promise to repay a fixed amount of funds.
  B) stock promises to repay a fixed amount to of funds to stock owners.
  C) stock represents ownership in a firm.
  D) dividends paid to owners of stock represent a firm's profits.

[AmberC1996]

Answer to Question 1

A positive statement is a description of how the world is. It is testable. A normative statement is a description of how the world ought to be. It is, by its very nature, not testable because there is no universally approved criterion by which the statement can be judged. I will receive an A for this course, is a positive statement made by an economics studentit might not be true, but it is testable. I will receive a good grade for this course, is a normative statement. Whether someone agrees with it depends on his or her interpretation of what makes for a good grade.

Answer to Question 2

B