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15 September, 13:59

An example of normative analysis is studying a. how market forces produce equilibrium. b. surpluses and shortages. c. whether equilibrium outcomes are socially desirable. d. income distributions.

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  1. 15 September, 17:49
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    An example of normative analysis is studying;

    c. whether equilibrium outcomes are socially desirable.

    Explanation:

    Economics can be defined as the branch of knowledge that is concerned with the production, consumption and the transfer of wealth. Economics can be divided into two broad branches, namely; positive and normative analysis.

    1. Positive analysis

    Positive analysis deals with the definition and explanation of various economical phenomena. Generally, positive analysis tends to ask the question 'what is'. Positive analysis majorly tries to deal with an elaborate description of phenomena using analytical tools such as; quantification, data analysis and fact finding. By doing so, they try to find how various phenomena in an economic system relate with each other to form a cause and effect relationship. They are often used to test and prove economic theories.

    2. Normative analysis

    Normative analysis aims at opinionated value judgement that aims towards economic improvements. It tends to answer the question 'what should be'. It's major concern is improving economic concepts by summing up peoples desires on what ought to be. Normative analysis relies so much on an individuals thoughts and feelings and thus can sound biased.
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