[Solved] Which of the following statements is an example of a positive economic hypothesis? — Ans: Increasing government spending will reduce unemployment. | Economic Awareness

Economic Awareness - Sectors of Indian Economy

Which of the following statements is an example of a positive economic hypothesis?

AThe government should provide free healthcare to all citizens.

BIncreasing government spending will reduce unemployment.

CInflation must be kept below 4% to ensure economic stability.

DTaxes ought to be lowered to encourage investment.

Step-by-Step Solution

Step 1: Understand positive economic hypotheses
Positive hypotheses are testable statements about cause-effect relationships that can be verified by data.
Step 2: Analyze options
Statement about increasing government spending reducing unemployment is testable and factual (positive). Other statements are prescriptive opinions (normative).
Final Answer:
Increasing government spending will reduce unemployment. → Option B
Quick Check:
Positive hypothesis = testable cause-effect statement ✅

Quick Trick: Look for testable cause-effect relationships for positive hypotheses.

Common Mistakes:

MISTAKES

Master "Sectors of Indian Economy" in Economic Awareness

Start learning the concept with an interactive lesson.

More Economic Awareness Quizzes

Which of the following statements is an example of a positive economic hypothesis?