Question

What do you understand by positive economic analysis?

Answer 1

Positive economic analysis refers to the analysis in which we study what is or how an economic problem is solved by analysing various positive statements and mechanisms. These are factual statements and describe what was, what is and what would be. These statements can be tested, proven or disproven and do not involve personal value judgments. For example, if someone says that it is raining outside, then the truth of this statement can be verified. It deals with actual or realistic situations.