(a) Suppose that our hypothetical economy- Disneyland produces Cars and Cameras. From the table given below calculate Real GDP and Nominal GDP.
Year
No of Cameras
Price per Camera
No of Cars
Price per Car
2005
200
$ 10,000
1,000
$ 6, 000
2014
1000
$ 2,000
1,500
$ 10,000
(i) Calculate Nominal GDP for the year 2005 and 2014. (2 mark)
(ii) Calculate Real GDP in the year 2014, using 2005 as the base year price. (1mark)
(b) List and explain briefly the key macroeconomic objectives. (2 mark)
(c) Explain the four stages of the business cycle. (2marks)
7 marks
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