1. (a) Define Gross Domestic Product (GDP) and briefly explain what is included in its measurement and what is not. Distinguish between nominal GDP and real GDP in your answer.

(b)Define economic growth and explain how the economic growth rate is measured.

2. (a)Question 1.8, Chapter 13, page 429, Hubbard et. al., Essentials of Economics, 4th ed..

(b) Question 1.10, Chapter 13, page 429, Hubbard et. al., Essentials of Economics, 4th ed..

3. (a) Define the 'business cycle' and explain the main stages of a business cycle.

(b) Discuss what is meant by an 'economic shock' and provide an example.

4. (a)What is meant by potential (or full employment) GDP? Illustrate this using an aggregate demand and aggregate supply graph.

(b)What are the main factors that determine the level of potential GDP?

5. Question 1.6, Chapter 13, page 429, Hubbard et. al, Essentials of Economics, 4th ed..

6. (a) GDP is a very useful measure of economic growth but it does have some potential limitations as a measure of total output. Discuss these limitations.

(b) GDP is one measure of living standards, but is not intended to be the only measure of living standards. What are other measures of living standards and wellbeing used by economists?

(c) The following are average annual economic growth rates for various countries. Can you use the below information to compare the economic wellbeing of these countries?

Country

Average Annual Economic Growth (%), 1980-2005

Australia

5.3

Egypt

4.4

Germany

1.8

Hong Kong, China

10.0

Japan

3.1

Malaysia

13.8

Russia

0.0

Singapore

15.8

United Kingdom

2.4

United States

4.7

Source:World Bank (2020), 'GDP Growth (% annual) Data, at https://www.worldbank.org, viewed 5 May 2020.

7. (a) Discuss the role that economic growth plays in the development of very poor countries.

(b) Discuss some of the impediments to poorer countries achieving long run economic growth.

8. (a) Question 2.5, Chapter 15, page 509, Hubbard et. al., Essentials of Economics, 4th ed., and show on a basic AD/AS diagram.

(b) Question 3.7, Chapter 15, page 510, Hubbard et. al., Essentials of Economics, 4th ed..