1. Gross Domestic Product (GDP) is noted for measuring a nation's total output of goods and services as well as its total income. Discuss in details: a) The determinants of production of goods and services in an economy, describing how income from such production is distributed. [10 marks] b) How output from the production is used in a closed economy. [5marks] 2. Economists use the term "money" in a more specialized way. a) Define money in terms of its functions, and briefly explain, with examples, the money creation role of commercial banks through fractional reserve banking. [10 marks] b) Explain the barter system and identify the challenges out of which money was introduced. [5 marks] 3. Fluctuations in economic activities are associated with movement in many macroeconomic variables. Explain, in particular, how a decline in GDP growth affects consumption, investment, and unemployment. [10 marks] 4. Explain (with examples) the crucial difference between how the economy works in the long run and how it works in the short run. [15 marks]