1. During the campaign leading up to the Scottish independence vote on 17 September there was a lot of discussion on the disadvantages of Scotland continuing to use the Sterling Pound as independent country. Considering the function of money and the importance of monetary policy, discuss some of the disadvantages. Would there also have been advantages for an independent Scotland to keep the Pound?
2. Economists often refer to an unemployment rate of 3 or 4% as full employment? Why?
3. A board member of the ECB was recently overheard saying: "One percent inflation might be better than two percent inflation, but minus two percent inflation is definitely worse than plus two percent". Explain!
4. Kenya just reported that its GPD is 20% higher than previously thought. Give some reasons of how this could have happened. What does this tell you in general about the measurement of GDP? Is GDP a good measure of country-level welfare?