A Level Economics AQA Practice Exam

How does a statement that involves subjective judgement differ from a fact in economics?

1. A subjective judgement is always incorrect

2. A fact can be objectively verified while subjective judgement cannot

3. A subjective judgement relies on statistical data

4. A fact is based on personal opinion

The correct answer is: A fact can be objectively verified while subjective judgement cannot

In economics, the distinction between subjective judgment and factual information is fundamental to understanding how economic theories and policies are formulated. A piece of factual information can be verified through observable evidence and is universally accepted based on data or reality, like statistical results showing unemployment rates or GDP figures. For instance, stating that the unemployment rate is 5% can be objectively confirmed via government reports and labor statistics. Conversely, subjective judgments are based on individual perspectives, beliefs, or opinions that may not be universally accepted or verifiable. For example, stating that "high unemployment is detrimental to society" reflects a personal viewpoint rather than a universally accepted fact. This reliance on personal beliefs and differing interpretations makes subjective judgments variable and open to debate. The incorrect options misrepresent the relationship between subjective judgments and facts. Notably, subjective judgments are not inherently incorrect, nor do they always rely on statistical data. Additionally, a fact cannot be equated with mere personal opinions; facts are grounded in observable realities rather than individual perspectives. Thus, the ability to objectively verify a statement delineates facts from subjective judgments in economic discourse.