a. From the following data calculate "National Income" by Income & expenditure method. (8 marks) Parameters $ Interest 150 Rent 250 Government Final Consumption Expenditure GFCE 600 Private Final Consumption Expenditure PFCE Profits Compensation of employees Net Income from Abroad NFIA Net Indirect Tax NIT Net Export Consumption of fixed capital Net Domestic Capital Formation NDCF 1200 640 1000 30 60 -40 50 34

What is deflation?

Agricultural price supports result in governments holding large inventories of agricultural products. Why do you think the government cannot simply give the products away to poor people?

Cross country comparisons of GDP per capita typically use purchasing power parity equivalent exchange rates, which are a measure of the long run equilibrium value of an exchange rate. In fact, we used PPP equivalent exchange rates in this module. Why could using market exchange rates, which sometimes change dramatically in a short period of time, be misleading?