Exercise Sheet 1 answers.pdf - Exercise Sheet 1 Answers Q1...

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Exercise Sheet 1 – Answers Q1. What is the real GDP growth using year 1 as a base year?
What is real GDP growth if you use the chain weighted measure?
Q2. Refers to the value of an asset, service, or company that is not physically recorded in any accounts but is implicit in the product, e.g., the opportunity cost of cash remaining in a savings account and not invested. To be comprehensive, GDP must include some goods and services that are not traded in the market place. Those components of the GDP are called imputations. Examples include the services of owner-occupied housing, financial services provided without charge, and the treatment of employer-provided health insurance. Rental cost of a similar car can be used. Q3.

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