Future Business Leaders of America (FBLA) Agribusiness Practice Test

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What type of economics is based on subjective statements often influenced by personal opinions?

Descriptive Economics
Normative Economics
Positive Economics
Empirical Economics

The correct answer is: Normative Economics

Normative economics focuses on subjective statements that are shaped by personal opinions, beliefs, and value judgments about what the economy should be like or what particular policies ought to be implemented. This branch of economics involves discussions around what is desirable and what is considered fair or unfair in economic scenarios. It deals with ideals and opinions, essentially asking questions such as "Should the government intervene in the market?" or "Is income inequality a problem that needs addressing?" In contrast, descriptive economics aims to provide an objective account of economic facts and phenomena without making judgments about them, while positive economics analyzes and describes economic events in a straightforward manner, based on data and established facts without the influence of personal opinions or beliefs. Empirical economics relies on data obtained through observation and experiment to test theories and hypotheses. The emphasis on subjective statements makes normative economics distinct, as it provides insights that reflect individual or societal preferences and ethical considerations rather than just observable data or outcomes.