Quiz 7: Measuring and Describing the Aggregate Economy


Unemployment rate is the percentage of total number of unemployed people who are activelyElois have Morlocks as their slave and slavery in itself cannot be equated to employment. So, if Elois start using machines, then the unemployment rate will not increase but fall as now Morlocks can do some work which is counted under employment, not slavery. Now Elois can get their work done by machines and Morlocks could do something which is necessary for them and could be counted as employment.

Output is the overall goods and services produced by a country in a time period. Growth rate is the percentage change in output in the given period of time. Per capita output is total output divided by the population of that country. When it comes to government intervention in economy then there are two common opposite thoughts travelling within different economists. One section of economists believe that government intervention is necessary to control the effects of business cycles, while others believe that government intervention is not useful and so is not needed. As per Austrian school of thought of economics, the government intervention creates more problems than the benefits they provide, so economy should be allowed to run its usual course even in the case of business cycles.

Macroeconomics which is study of economy as a whole is studied in two perspective, that are short-run which focuses on demand side economics andThe