1) U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell you, and what does it not tell you, about the well-being of U.S. residents? What are the limitations of the GDP as a measure of economic well-being? Given the limitations, why is GDP usually regarded as the best single measure of a society's economic well-being?

2) What is an intermediate good? How does an intermediate good differ from a final good?

Explain why is it the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

3) GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included.