Distinguishing positive vs. normative statements in economics

Steps:

• Define positive statements as objective, fact-based claims verifiable by evidence.
• Define normative statements as subjective, value-based opinions involving "should" or desirability.
• Analyze each option for factual description versus judgment.
• Select the option that describes reality without prescribing values.

Why C is correct:

• Positive statements describe what is (verifiable fact), and C claims "income inequality is decreasing," a testable observation tied to economic data trends.

Why the others are wrong:

• A: Normative, as "fair" expresses a subjective value judgment on progressive taxes.
• B: Normative, as "desirable" reflects a personal or ethical preference for equality.
• D: Normative, as "should be" prescribes an ideal tax structure based on opinion.

Final answer: C