Answer the following questions.

1.What is circular flow of income, explain with diagrams?

2.What are the main components of measuring GDP with what is demanded?

3.What are the main components of measuring GDP with what is produced?

4.Would you usually expect GDP as measured by what is demanded to be greater than GDP measured by what is supplied, or the reverse?

5.Why must you avoid double counting when measuring GDP?

6.What is the difference between a series of economic data over time measured in nominal terms versus the same data series over time measured in real terms?

7.How do you convert a series of nominal economic data over time to real terms?

8.What are the two main difficulties that arise in comparing different countries' GDP?

9.List some of the reasons why economists should not consider GDP an effective measure of the standard of living in a country.