BE 313

MANAGERIAL ECONOMICS
Positive and Negative Economics
Positive Economics is an economic analysis that considers economic
conditions “as they are”, or examines economics “as it is”. It simply
answers the question ‘what is’.

Example: 
The economy is now experiencing a slowdown because of too much
politicking and corruption in the government.

In the UK the rate of unemployment has increased by 50% in the past three
years.
Positive and Negative Economics
Normative Economics is an economic analysis that judges economic
conditions “as it should be”. It is that aspect of economics concerned with
human welfare and deals with ethics, personal value judgments, and
obligations analyzing economic phenomena. It answers the question ‘what
should be’. 

Example: 
> The Philippine government should initiate political reforms to regain
investor confidence, and consequently uplift the economy.
> The MPC should increase interest rates to deal with the rise in inflation.