Qu.1 Annual Real, Nominal GDP per capita 70 marks The table below provides the average annual growth rates (%) in Nominal GDP, Real GDP, Real GDP per capita, prices and population for Australia over the last five decades. Average Annual Growth (%) in Australia Time Nominal Real GDP per Real GDP Prices Population Period GDP capita 1970's 13.8 3.4 1.7 10.4 1.8 1980's 12.0 3.3 1.9 8.7 1.5 1990's 5.4 3.3 2.1 2.1 1.2 2000's 7.3 3.2 1.8 4.1 1.4 2010's 4.5 2.6 1.0 1.9 1.6 Average 8.6 3.2 1.7 5.4 1.5 Source: Derived from Australian Bureau of Statistics (ABS), 2022, A855204.0 Australian System of National Accounts, "Table 1. Key National Accounts Aggregates", ABS Canberra.d. Net Domestic Product (NDP) is GDP less the depreciation of capital (how much capital equipment is consumed or becomes obsolete). Currently, NDP only considers the depreciation of financial capital and does not include other forms of capital such as human capital, social capital and natural capital. Many economists suggest that a "true NDP" which includes the depreciation of all forms of capital is a better and a more "sustainable" measure of a nation's economic growth than GDP. Why might a "true NDP" be a more "sustainable" measure of a nation's economic growth than GDP? (10 marks) ii. If nations focused on a "true NDP" instead of GDP how do you think it may affect government policy? (10 marks) iii. If the depreciation of all forms of capital is a constant proportion of GDP growth, why might it not matter whether NDP or GDP growth is the focus of government policy. (10 marks)