Question

A positive economic statement like "pollution taxes decrease the quantity of pollution generated by firms" would:

a) Be backed by empirical evidence and objective analysis
b) Indicate a cause-and-effect relationship between pollution taxes and reduced pollution
c) Focus on describing how things are rather than how they should be
d) All of the above

Answer 1

A positive economic statement like "pollution taxes decrease the quantity of pollution generated by firms" would indicate that the statement is backed by empirical evidence, indicates a cause-and-effect relationship, and describes the current state of affairs.

Step-by-step explanation:

A positive economic statement like "pollution taxes decrease the quantity of pollution generated by firms" would indicate all of the above options:

1. Be backed by empirical evidence and objective analysis
2. Indicate a cause-and-effect relationship between pollution taxes and reduced pollution
3. Focus on describing how things are rather than how they should be

Empirical evidence and objective analysis are used to support the statement, as firms that have to pay pollution taxes are motivated to reduce pollution to minimize their taxes. The statement also suggests a cause-and-effect relationship between pollution taxes and reduced pollution, as firms with lower costs of pollution abatement will implement the necessary measures to minimize their taxes. Lastly, the statement focuses on describing the current state of affairs, which is how pollution taxes decrease pollution.