Question #1

1)What does GDP attempt to measure?

2)Briefly differentiate between nominal and real GDP.Why is real GDP a more accurate measure of economic growth compared to nominal GDP?

3) What are two weaknesses of GDP?

part B

Use the information given and show in a table format how value added method is used to

Calculate GDP.

1.A forester chops down 200 trees and sells them @ N$50 each to the coal factory on a farm. The coal factory processes these trees into coals and sells the coal @ N$20 000 to the coal wholesaler's.The coal wholesaler's goes to the market and sell 500 bags of coal's @N$100 each to pick n Pay. Pick n Pay sells the 500 bags of coal's @ N$150 each to its customers. According to this example, how much value added do the coals contribute to the GDP?