Question

Indicate whether the statement is positive economic analysis or normative economic analysis:

A devaluation of the U.S. dollar would increase exports from the United States.

Answer 1

The statement is positive economic analysis.

In economics, positive analysis is factual; it is based on data, such as the effect variables have on one another. Normative analysis, on the other hand, has its core in opinion and value judgement.

You could say that positive economic analysis is objective whereas normative economic analysis is subjective.

In the given sentence, a cause-and-effect relationship is described between two phenomena: the dollar devaluation and the increased exports. This is based on factual observation rather than opinion.