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1.

Does GDP give us a complete picture of standard of living in a country No, because it does not account for inflation Yes, bec


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2.

The same car costs $10k in USA and AED30k in UAE (1$=3.67AED). Purchasing power Same for both Better for AED Need more inform


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3.

Question 5 Nominal GDP of India in 2015 was probably greater than that in 2005 because Nominal GDP in 2015 was probably lower

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4.

Trade between countries © must benefit both countries equally limits a countrys ability to produce goods on its own. allows


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5.

A country has a comparative advantage in producing a good when am 0 it has the best technology o it has the lowest opportunit


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6.

If a country does not trade with other countries, it can only consume ILLUMIHILI ST what is naturally available what its citi


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7.

IF UAE exports more crude oil to India than the refined oil it imports from India, then © UAE has a trade defecit with India


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8.

What led to the initial surge in global trade? Immigration to the new world All of these factors Colonization Industrializati


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9.

Which of these was NOT part of the Washington consensus on strategies for economic growth? Allowing for foreign direct invest

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Answer #1

1) Option C
The nominal GDP measures the value of the output in the geographical limit of an economy in a given period. However, it is a gross value and it does not take into account the population. The GDP of China is almost 5 times that of the France. However, GDP per capita of the France is almost 4 times higher than that of China because China has a huge population. A higher GDP per capita indicates a higher standard of living.

2) Option B
The exchange rate is given as 1USD = 3.67AED. So a $10k car in the US should cost 36700AED but its price is 30K AED. It indicates that the AED has more purchasing power.

3) Option C
The nominal GDP takes into account the current year prices and current year quantities to calculate the value of the GDP. The prices of the products tend to rise because of the inflation over the period of the time. The inflation as it suggests inflates the nominal value of the GDP.

4) Option A
If two countries engage into the trade then they will produce the goods in which they have a comparative advantage.
They will use their resources to produce the maximum in which they have a comparative advantage and then they can trade the excess with each other. It means that the both countries will produce more and consume more.
However, the terms of trade should have equality other wise the benefits will be asymmetrical and that could hamper the trade.

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