1. Why is it necessary to calculate real GDP?

2. Is it true to state that higher economic growth will always increase the economic welfare of a nation? Explain.

3. Explain the importance of "green GDP" and name two (2) countries that are using it.

4. A news article stated, "The unemployment and labor force participation rate increased by 0.1 and 0.4 percent respectively". Is this positive news for the economy? Explain.

5. Define "underemployment" and explain two ways a government can try to reduce it.

6. A politician stated, "If my party wins the election we will ensure that we achieve an unemployment rate of zero percent. Is this realistic? Explain.

7. Does the unemployment rate underestimate the true level of unemployment? Explain.

8. Define the business cycle and explain why changes in the business cycle will affect the revenue of a fruit shop and a furniture shop differently.

9. Describe two (2) variables a government can look at to predict where the economy will be in the next six months (HINT: Leading, Coincident).

10. Your friend is very happy because his real wage has increased unexpectedly. Explain, using the concepts of real income, and nominal income, anticipated and unanticipated inflation rate, how is this possible.