Using a model to explain the cause-and-effect analysis of actions and their outcomes is most consistent with
A) Normative economic analysis
B) Positive economic analysis
C) Subjective analysis
D) Institutional analysis

Question

Quizplus · Accepted Answer

Cause-and-effect analysis is a tool used in positive economic analysis, which deals with facts and data concerning what is happening in the economy. A positive economic analysis seeks to explain the economic phenomena as they are, without making any value judgment on whether they are desirable or not. Therefore, using a model to explain the cause and effect of actions and their outcomes is in line with the positive economic analysis approach.

Using a Model to Explain the Cause-And-Effect Analysis of Actions