Define Normative Economics, With a Suitable Example.

Normative economics is a branch of economics that deals with economic fairness and how the economy should be. It is subjective and heavily relies on value judgments rather than cause and effect. It is therefore said to follow the ‘what ought to be’ approach.

It is different from positive economics which is based on a ‘what is’ approach and is dependent on objective data analysis.

E.g: Labourer should receive greater part of capital profits

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