Positive economics

Positive Economics

Positive economics is the study of cause and effect relationships in economics. Positive economics is concerned, in essence, with the creation and subsequent checking of true and objective claims. This division of economics is based on facts; however, the assertions must be factual rather than inherently true. Normative economics, on the other hand, attempts to analyze actual economic arguments from a legal and spiritual perspective. Normative economics is used by policymakers to determine if real economic activities are positive or undesirable. Positive economics is descriptive, objective, and verifiable, while normative economics passes value judgment, is subjective, and seeks to provide solutions for economic value. For example, the statement "the government-funded education system increase public expenditure" is part of positive economics because it can be examined and proved, while the statement "the state ought to fund free education for all citizens qualifies as a normative economic statement."

Question 2

Microeconomics

Microeconomics concerns markets, individual decisions, and sectors of an economy. This branch of economics examines economic topics such as consumer behavior, single or particular markets, and the firm theory. In this respect, it studies the supply and demand of unique markets, the choice theory, the labor markets, such as labor demand and the determination of the appropriate wage rate, and the externalities that arise of production and consumption of goods and services.

Macroeconomics

On the contrary, macroeconomics examines the behavior of the economy in its entirety, such as entire industries and the economies in which they operate. The economy-wide phenomena studied under macroeconomics include the Gross Domestic Product and its effects on employment, the rate of growth, national income, and price levels. Other issues of concern under macroeconomics include international trade and globalization, government borrowing, the reasons for the variations in living standards, inflation, monetary and fiscal policy.