Discuss three approaches in measuring the gross domestic product. (10 marks) (b) Explain why GDP if often criticized as a measure of aggregate economic activity? (15 marks) (c) What is the difference between nominal and real GDP growth? What would need to occur for real GDP to be higher than nominal GDP? 

a) Explain the properties of the Keynesian consumption function. On the basis of the Keynesian consumption function what would be the likely impact on aggregate consumption in the eventuality of a rise in average wealth driven for example by a buoyant performance of the stock market. [9 marks] 

b) Distinguish between a government budget deficit and national debt as well as state the respective deficit-to-GDP and debt-to-GDP ratios which each EU member state is expected not to exceed on the basis of the EU Stability and Growth Pact.