1. a) Explain the components of expenditure approach in GDP.

b) Below is the data of a hypothetical Country:

	Price per computer	Quantity of computers	Price per cell phone	Quantity of cell phone
2005	10	200	8	75
2006	14	250	10	75
2007	16	350	12	125

i) Compute nominal GDP, real GDP and GDP deflator for each year using 2005 as base year.

ii) Compute the inflation of year 2007 from 2006.

2. Answer the following questions on the basis of the following table:

Goods	Price2012	Price2013	Price2014	Quantity2012	Quantity2013	Quantity2014
Pizza	700	750	800	50	50	50
Pasta	500	500	550	80	80	80
La Zaina	450	500	500	120	120	120

i) Assume base year is 2012. Calculate CPI for the year 2012, 2013 and 2014.

ii) Calculate inflation for the year 2013 and 2014.

b) What are the problems in measuring cost of living? Explain with suitable example.

3. a) What are the differences between frictional and structural unemployment? Explain.

b) Calculate Unemployment rate and labor force participation rate for the year 2013, 2014

and 2015 on the basis of the following information.

Labour Force Characteristics	Year
2013	2014	2015
Employed	700	1200	1500
Labor force	900	1800	2000
Adult Population	1200	2000	2100

4. a) What is labor productivity? Explain the preconditions for labor productivity growth?

b) What are the policies that can be taken for faster economic growth?

5. Write Short on the followings:

a) Income Approach to measure GDP

b) CPI vs GDP Deflator

c) Natural Rate of unemployment

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