Define a normative statement in economics.

A normative statement in economics refers to a claim that expresses a subjective value judgment about what ought to be. It involves opinions or beliefs rather than objective, factual information. For example, saying "the government should increase the minimum wage" reflects a perspective on how the economy should function based on ethical or moral beliefs.

The correct answer highlights the nature of normative statements as inherently subjective, contrasting them with positive statements, which are objective and based on measurable facts. This understanding is crucial in economics, as it helps to differentiate between opinions and empirical analysis.

In contrast, claims based on stated facts pertain to positive statements that can be tested or validated, while an analysis of market trends is typically a descriptive approach focused on observable data. A model for predicting future outcomes is also a constructive tool that forecasts using data but does not encapsulate the subjective value judgments contained in normative statements.