In answering the question, you should emphasize the line of reasoning that generated your results, it is not enough to list the results of your analysis. Include correctly labeled diagrams, self or required, in explaining your answer. A correctly labeled diagram must have all axes and
curves clearly labeled and must show directional changes.
Assume an open economy with a public sector,
Identify two methods of calculating gross domestic product for this economy
b. Explain why the two methods you identified in part (a) must yield the same value of gross domestic product.
e Identify one shortcoming of using gross domestic product as an indicator of the actual level of national output.
d. If nominal gross domestic product increased by 4 percent in 1996, identify two additional pieces of information you need before you can conclude that the living standard of the
typical person increased by 4 percent during that year.
I y
E
2