Extract 2 UAE's economic recovery gaining momentum The International Monetary Fund (IMF) has commended the UAE on its successful vaccination programme and said the country's economic recovery is gaining momentum, with the government injecting billions of dirhams (Dh) to stimulate the economy following the Covid-19 pandemic. The UAE federal government provided Dh388 billion worth of fiscal stimulus to mitigate some of the economic impact of the pandemic. The central bank pumped Dh50 billion to boost liquidity in the banking sector to sustain the private sector amidst credit crunch after the pandemic. The economic recovery is also reinforced by a rebound in tourism and domestic demand related to the delayed Expo 2020. Overall GDP growth is projected at 2.2% in 2021. Over the medium-term, the IMF sees growth accelerating with the benefit of structural reform efforts, increased foreign investment, and rising oil production. Higher oil prices are expected to benefit the UAE's current account balance, which is projected to increase to 10% of GDP in 2021. Oil prices have been consistently rising over the past few months, especially after the Ukraine-Russian tension. Source: Adapted from Khaleej Times, 19 February 2022. (a) Define the term 'gross domestic product' (GDP). With reference to Extract 1, provide three reasons for which the size of GDP or GDP growth might fail to reflect a country's competitiveness and prosperity. [8 marks] (b) Using both extracts, comment upon the level of investment and net exports in the UAE economy [8 marks]Extract 1 How the UAE economy's competitiveness compares globally after Covid shock The International Institute for Management Development (IMD) has named the UAE as the Middle East's most competitive country and is among the top ten globally, according to new rankings that reflect the impact of the Covid-19 pandemic on economies around the world. Switzerland came top, ahead of Sweden and Denmark. The Netherlands and Singapore were also among the top five The IMD World Competitiveness Ranking ranks 64 economies and assesses the extent to which a country promotes the prosperity of its people by measuring economic well-being. The report finds that qualities such as investment in innovation, digitalisation, welfare benefits and leadership resulting in social cohesion have helped economies better weather the crisis, allowing them to rank higher in competitiveness. The UAE has implemented a number of policies and initiatives aimed as supporting its economy and people amid the ongoing pandemic. It has amended its nationality laws to attract more foreign talent to contribute to the country's development journey'. The UAE also relaxed its foreign ownership laws aimed at attracting investment into an economy reeling from the coronavirus and a decline in oil prices. China racked 16th, up from 20th last year. The world's second largest economy continue to reduce poverty and boost infrastructure and education, Still, China does not rank among the top ten most competitive economies despite its size and GDP growth potential. This is what competitiveness is about, prosperity, not necessarily growth. Overall, the IMD World Competitiveness Centre noted the following trends: . Innovation is the bedrock of long-term performance, with education and other factors driving both a productive workforce and research. Digitally advanced economies that have smoothly transitioned to work-from- home' have thrived compared to their peers. The economies that provide government efficiency through a strong social safety net, including unemployment benefits, bounced back quicker. Health infrastructure also had an impact and is dominated by wealthy economies with a strong social net