1) What is the difference between GDP and GNP?

2) Are there any measurement problems that occur with the GDP calculation? Explain.

3) Which is better for making comparisons over time, nominal GDP or real GDP, and why?

4) How are total output and total income related to each other, and why?

5) Why does the unemployment rate go down as more people become discouraged about the economy?

6) Is the unemployment rate the same for all groups of people in an economy? Why or why not?

7) Explain two economic costs, and two human costs of unemployment.

8) How can the outsourcing of jobs cause production possibilities to expand?.

9) What is the difference between demand-pull inflation and cost-push inflation?

10) Discuss two mechanisms that offer protection from the effects of inflation.

11) Based on the real interest rate, who tends to benefit from unanticipated inflation in terms of borrowing

and lending?

12) What are the different phases of the business cycle, and how are production and employment affected

in each phase?

13) Is equilibrium always at an optimal level of output? Explain your answer.

14) What are the differences between classical theory and what Keynes believed?