M8 Question and Answer Measuring the Economy What does GDP

M8 Question and Answer

Measuring the Economy

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? 
4. GDP can be expressed as the sum of four types of expenditure. Identify and briefly discuss each of these four types of expenditure.