Y6

What is Gross Domestic Product (GDP)? (3 marks) Identify 3 challenges with the use of GDP as a measure of welfare. (3 marks) Differentiate between Nominal GDP and Real GDP. (4 marks) If nominal GDP is rising, then real GDP must be rising too. Do you agree? (4 marks) Suppose residents of Lapaz produce only 3 goods: laptops, phones and tablets as illustrated in the table below. Year Laptops Phones Tablets P Q P Q P Q 2008 70 2 60 90 2009 2 85 3 75 4 120 2010 110 4 87 6 150 Estimate the nominal GDP of the various years. (6 marks) 11 Estimate real GDP for the various years. (6 marks) 111. What is the growth rate in real GDP between 2008 and 2009; and 2009 and 2010? (4 marks)