Naked Economics Chapter 15 Summary

1028 Words5 Pages
Chapter 15, Question 14 The National Income and Product Accounts (NIPA) let economists judge our nation’s economic performance, compare American income and output to that of other nations, and track the economy’s condition over the course of the business cycle (Stone 408). There are various forms of national income such as Gross Domestic Product (GDP), Gross National Product (GNP), Net National Product (NNP), National Income (NI), Disposal Income (DI) and Personal Income (PI) (Stone, 2008). The broadest and most widely used measure of national income is gross domestic product (GDP), the value of expenditures on final goods and services at market prices produced by domestic factors of production (labor, capital, materials) during the year (Ott,…show more content…
7). This type of unemployment benefits the worker because it allows them to search for jobs they like the most and for jobs that suits them the best. This gives the worker an opportunity to find a better job match with a competitive pay. Fictional unemployment also benefits companies by allowing them opportunity to find qualified workers that match their corporate values. Companies will have an opportunity to choose among the best talent on the market. Without fictional unemployment people would tend to stay in their current jobs for life and create a stagnant system that could create a negative effect like subduing innovation. Fictional unemployment is also important because it matches the demand for workers with the supply from companies and helps bring equilibrium into the labor…show more content…
If this persist long enough it can cause people to revolt against their government and can lead into wars. Other effects of hyperinflation are the relocation of wealth from the public to the government. Once people lose faith in the value of money they will begin to trade goods and services instead of directly purchasing good and services with the country’s currency. During this time interest rates will lower, which will reduce the value of money even more. To stop hyperinflation a government needs to restore confidence in the countries budget system and balance their budget. They will need to stabilize the currency in the country by raising interest rates and stop printing money. In worse cases they may need to introduce a new monetary system which would create new currency with a stronger backing. Increasing the interest rates will make it harder to borrow money and this will increase its value. Very importantly they will need to implement a system to accurately measure and track inflation so they can halt the growth of the money

More about Naked Economics Chapter 15 Summary

Open Document