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Long Questions


Question 1

(a) Explain what is meant by the circular flow of income.

(b) Using diagrams to illustrate your answers, explain the conditions necessary for the circular flow of income of a country to be in equilibrium.

Question 2

(a) Describe the methods by which Gross Domestic Product can be measured.

(b) To what extent can Gross Domestic Product be used as a reliable indicator of living standards, both nationally and internationally?