Business Economics Gm545 Paper 2

Chapter 15, Question 14

The purpose of National Income Accounts or NIA’s, is to provide a quantitative basis for choosing and assessing economic policies as well as making possible quantitative macroeconomic modeling and analysis (Ott, 2008). NIA’s are typically combined with key data such as population, productivity, or inflation to give us numbers such as our Gross Domestic Product or GDP, to help give snapshots into how our economy is doing. These numbers are then used to make decisions and policy however, there are limitations and they are by no means the only answer that should be required to make such decisions. These numbers only tell half of the story while the other half are told using qualitative results such as the average male life span for the U.S. or the average highest education level of the same male.

Finding numbers like our GDP will help us to understand if we are being productive and show us whether or not our economy is growing but it will not tell us that American are working more and making less which may be deceiving because we are constantly growing. GDP does not consider childcare or stay at home parents to have any value even though we know how important these are to the quality of life of any child. The GDP uses mean income instead of median income to measure with which can be misleading when a small percentage of people control a large percentage of the wealth and it will not account for the disparity between those that have money and those that do not.

The GDP numbers are not going to show us as that good jobs are hard to find and even harder to keep than they were before. The numbers are not going to show us that more work is required of the same job or that benefit packages are shrinking. The numbers will not indicate or take into consideration that we are losing our morals and that our religious freedoms are being challenged and pushed from our society in the name of progress.

Chapter 16, Question 5

Frictional unemployment...