Distinguishing Positive from Normative Statements

Steps:

• Define positive statements as objective facts that can be tested empirically, unlike normative statements which express opinions or values.
• Examine each option for factual claims versus judgments of preference or obligation.
• Identify the option that describes an economic outcome without prescribing action.
• Confirm by checking if the statement can be verified with data.

Why B is correct:

• Positive statements describe what is or will happen; B factually asserts that low inflation leads to a stable macroeconomy, testable via economic indicators like GDP volatility.

Why the others are wrong:

• A: Normative, as it prefers one aim (low inflation) over another without factual basis.
• C: Normative, prescribing government intervention as a moral imperative.
• D: Normative, advocating tax cuts to achieve a desired outcome (improved living standards).

Final answer: B