Great and Almost-Great Magnitudes in Economics

Abstract

Which ratios and key magnitudes should an educated economist know? An inevitably personal selection is offered below. The list is presented in the form of a quiz to liven up the exercise of pondering them, and therefore a question mark follows each title. 1) The ratio of savings (personal and total) to income? 2) Labor's share of output? 3) The capital-output ratio? 4) Ratio of the value of output of agricultural land to its market price? 5) The “real” riskless rate of interest in various eras? 6) The rate of return on common stocks? 7) The price-earnings ratio for common stocks? 8) The velocity of money? 9) The shares of the labor force in the farming, manufacturing, and service sectors, now and in earlier times? For those of you whose eyes share with mine the sinful propensity of straying to the “answer” before you have formulated your own, the ratios are partially concealed in paragraphs of explanation.

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