What type of economics focuses on what ought to be and includes value judgments?

Normative economics is the branch of economics that deals with value judgments and what ought to be rather than what is. It involves subjective statements that reflect opinions, beliefs, or preferences about economic policies and outcomes. For instance, a normative economic statement might argue that the government should intervene to reduce poverty levels, as this reflects a personal or societal value about the importance of reducing inequality.

In contrast, positive economics is concerned with objective analysis and focuses on statements that can be tested and validated, relying on facts and cause-and-effect relationships. Descriptive economics aims to provide an accurate account of economic phenomena without infusing it with personal opinions or judgments. Behavioral economics studies how psychological factors influence economic decisions, but it does not inherently involve normative judgments about what should be done in the economy.

Thus, normative economics is specifically characterized by its focus on ethical considerations and value-laden statements, making it the correct answer.