2014 May (GDP/CPI) Paper 3 HL

2014 May (GDP/CPI) Paper 3 HL

(1)  (a) Calculate the GDP of Country Z in 2012.

C + I + G + (X – M) = GDP

6520 + 1020 + 3300 + (2295 – 2450) = $10, 685, 000, 000

 

(b) The population of Country Z is 420,000. Calculate per capita GDP for Country Z in 2012.

 

GDP/ Population = GDP (per capita)

10, 685, 000, 000/ 420,000 = $25,440.48

 

(c) Countries may calculate GDP using the output approach, the income approach or the expenditure approach. Outline the difference between the expenditure and the income approach.

 

Expenditure Approach = C + I + G + (X –M)

Income Approach = wages + profits + interest + rent

Output Approach = Sum of 1^st, 2^nd, 3^rd sectors’ output

 

(d) Economists have suggested that it is important to calculate “green GDP”.

Outline the meaning of the term “green GDP”.

 

Green GDP = GDP adjusted for the effects of production on the environment.