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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Definitions:

Dualistic Thinking

A cognitive tendency to see situations and issues in black and white, categorizing concepts as either/or without acknowledging complexities.

Relativistic

Pertaining to the concept that points of view have no absolute truth or validity, having only relative, subjective value according to differences in perception and consideration.

Pragmatic Thought

A mode of thinking concerned with practical matters and the application of ideas and theories to solve problems or achieve goals.

Reflective

Thoughtful consideration of one's experiences and actions.