Positive economic theory studies only facts

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positive economic theory studies the facts and is aimed at the exclusion of qualitative assessments.It is based only on the actual state of the economy and must help shape an effective policy aimed at stabilizing the various processes in the state.In other words, this theory is based on a statement of facts.Thus, the positive economic theory studies:

  • consequences which may result in a definite decision of a business entity;
  • means with which to achieve this goal;
  • the cost of achieving them.

In addition to this, a positive approach can:

  • explain and predict economic phenomena;
  • study the general economic laws;
  • identify specific (causal) or functional links between certain phenomena.

positive and normative economic theory are opposites of each other.Thus, in contrast to the standard set out aspects of the first theory is based on the study of the economic state of the qualitative assessments of the state.Normative method can express a personal opinion on the necessary condition of an object.

positive economic theory studies the selection of effective ways to meet human needs with the use of sustainable sources.In other words, the subject of economic theory accepted the contradiction between limited resources and unlimited needs of man.Thus, positive and normative economic theory of the function of finding a rational mix of resources to obtain the greatest satisfaction of social needs.The following function has a practical orientation.It is based on certain knowledge, positive economic theory studying public policy and provides specific recommendations.

economics and economic theory are in communication with each other by defining their object of study.Thus, depending on this criterion covers the following concepts:

  • macroeconomics (economic theory that studies the state economy);
  • microeconomics (economic theory, which studies the behavior of specific economic entities).

Depending on the level of economic studies (macro or micro), there are certain goals.

  • stability of the national production, from its scope depends on the dynamics and the level of welfare of citizens, state the nature and the volume of export transactions and the overall political situation.
  • stability in prices, which are able to create the conditions of economic predictability and help choose the direction of stimulating the processes of investment and lending.It is necessary to note the positive impact of this factor on the strengthening of the credibility of the monetary unit, functioning in the country, which leads to overall stability in the social community.
  • equilibrium in the foreign trade balance.