Distinguishing positive from normative economic statements

Steps:

• Recall that positive statements describe what is (factual, testable) while normative statements describe what ought to be (value-based opinions).
• Evaluate each option for empirical testability versus subjective judgment.
• Identify the option expressing a moral or preferential view as normative.
• Confirm the rest as positive by their focus on cause-effect relationships.

Why D is correct:

• D is normative because "fairest way" involves a subjective value judgment about equity, not a testable fact.

Why the others are wrong:

• A is positive: It states a testable incentive effect on saving behavior.
• B is positive: It describes a verifiable impact based on income levels.
• C is positive: It predicts a measurable change in labor supply.

Final answer: D