To compare the economy's aggregate output in two different time periods, economists compare the
A)nominal national income for the two periods.
B)unemployment rates for the two periods.
C)real national income for the two periods.
D)potential national incomes for the two periods.
E)inflation rates for the two periods.

Question

Quizplus · Accepted Answer

In order to compare the economy's aggregate output in two different time periods, economists compare the real national income for the two periods. Real national income adjusts for inflation by using a base year's prices, allowing for a more accurate comparison of output over time. Nominal national income, potential national income, and inflation rates do not provide an accurate comparison of output over time as they do not adjust for changes in the price level. Unemployment rates may provide some insight into the health of the economy but do not directly compare aggregate output.

To Compare the Economy's Aggregate Output in Two Different Time