Question 3[15]

3.1. In order to judge the performance of the economy, economists distinguish between five main macroeconomic objectives. List the five macroeconomic objectives and provide the appropriate measurement for each objective.(5)

3.2.Consider the table below and answer the questions that follow.

Year Nominal GDP Real GDP

2018 4 696 118 3 134 781

2019 4 901 135 3 137 249

3.2.1. Differentiate between nominal and real GDP. (1)

3.2.2. Define the GDP deflator. (1)

3.2.3. Given the definition of the GDP deflator in 3.2.2, calculate the inflation rate for the period 2019.(3)

3.3.Consider the table below and answer the questions that follow.

Country Gini coefficient

Austria 30.5

Botswana 53.3

China 38.6

Norway 27.5

South Africa 63.0

Zimbabwe 43.2

3.3.1. Explain what the Gini coefficient is.(2)

3.3.2. Rank the provided countries starting with the highest level of inequality and moving to the lowest level of inequality. (3)