Does globalization promote economic growth, and how does ...

[Mr.Thesaxman]

Does globalization promote economic growth, and how does globalization affect the welfare of a given country's citizens?
 
  What will be an ideal response?

Question 2

Examine the following statements and determine if they are normative or positive in nature. Explain your answer.
 
  a. The U.S. automotive industry registered its highest growth rate in 5 years in 2012; U.S. auto sales increased by 13 compared to 2011 .
  b. The U.S. government should increase carbon taxes to control emissions that cause global warming.

[kishoreddi]

Answer to Question 1

More globalized countries generally experience much higher annual growth rates in real GDP per capita than countries that are less open to foreign trade and investment. As countries become more globalized, advances in technology in those countries become more likely, and advances in technology are a key to economic growth. However, foreign influences in some countries are not always viewed as positive, as they can have a greater impact on culture than some would like. In addition, multinational firms that operate in foreign countries may also pay very low wages or fail to uphold the same safety and environmental regulations they are required to follow in their own countries.

Answer to Question 2

a. This is an objective statement about the rate of growth in the U.S. automotive industry. Positive economics is analysis that generates objective descriptions or predictions about the world that can be verified with data. Since data can be used here to verify the rate of growth and whether it is the highest in five years, this is a positive statement.
b. The statement that the government should increase carbon taxes to control emissions is normative since it states what the government ought to do. Normative economics advises individuals and society on their decisions and is almost always dependent on subjective judgments.