Question: When determining whether a nation's economy is doing well or not, economists takes into account the total income that everyone in the economy is earning

When determining whether a nation's economy is doing well or not, economists takes into account the total income that everyone in the economy is earning and this is stated as the Gross Domestic Product (GDP).

a) Explain why the measurement of Gross Domestic Product (GDP) is important for an economy?

b) Explain the four components of Gross Domestic Product (GDP).

c) State any 2 reasons why real GDP may not provide a good indication of a country's standard of living.

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