There Are a Number of Measures of Aggregate Economic Activity

question 71

Essay

There are a number of measures of aggregate economic activity, such as GDP, GNP, national income, personal income, and disposable personal income. Each of these measures can be a good indicator, depending on the issue under consideration. For each of the following issues, give your reasons for selecting one of the measures just mentioned as the best indicator to use in studying the issue:
a.the proportion of income households save
b.the relative share of earnings going to labour versus capital
c.the total output of final goods and services

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