Microeconomics question 1

 QUESTION 1 :

a. Classify the following statements into Positive and Normative statements with reasons for your classification. 

i. The government should emphasise more on poverty reduction than on economic 

growth.

 Answer Normative economic, the government should emphasise more on poverty reduction than on economic growth

ii. People would prefer a policy that lowered the level of unemployment to one that 

brought inflation down.

Answer Normative,  Because People would prefer a policy that lowered the level of unemployment to one that brought inflation down.

iii. Higher taxes discourage work effort.

Answer Positive economic, Higher taxes discourage work effort. it is based on the facts

iv. A rapid growth rate of money is the cause of inflation. 

Answer: positive economic, A rapid growth rate of money is the cause of inflation.

v. Government should raise the tax on tobacco as to discourage people from smoking.

Answer: Normative because  Government should raise the tax on tobacco as to discourage people from smoking.