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Three Economics Questions

Chapter 15 question 14

What are some of the Limitations of the national income accounts in how they represent our standard of living?

Chapter 16 question 5

Why is frictional unemployment important to have in any economy?

Chapter 16 question 6

Explain why hyperinflation has such a devastating impact on economies. Explain what it takes to stop hyperinflation.

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Chapter 15 question 14

What are some of the Limitations of the national income accounts in how they represent our standard of living?

The national income accounts attempt to measure the total economic activity in a nation in a given period of time. This measurement is made through measuring transactions that contribute to a country's income and output. In order for transactions to be included, and the economic activity that they produce, the transactions must be recorded. If no records exist, expenditures are omitted from the national income accounts. Consequently, the national income accounting method ignores the entire underground economy. Other activities that create value in an economy that are rarely recorded and ignored in the national income accounts are household activities, such as yard-work, child rearing, etc. These activities represent ...

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