What is applied economics ? How is it contrasted with positive and normative economics??
Answer:
It doesn't really make sense to contrast applied economics with positive and normative economics.
Applied economics is the application of economic theory to real world problems. Applied economics is about asking questions about the world and trying to find the best answers by collecting data, by observing people, firms, and governments, and by doing quantitative analysis.
If economists make factual statements -- through theoretical or applied economics -- that is positive economics. For example, saying that a 10 percent increase in the price of cigarettes will lead to a 5 percent decrease in somoking is a positive statement.
If economists make judements, that is normative economics. For example, saying the government SHOULD raise taxes on cigarettes to wipe out smoking, is a normative statement.
More Questions and Answers: