ART Decreages the International competitiveness of South African producers. ) In
ID: 1133694 • Letter: A
Question
ART Decreages the International competitiveness of South African producers. ) Increases the costs of imported goods. 10 During a recession, cyclical unemployment will and cyclical inflation will ) decrease; decrease o) decrease; increase c) increase; increase d) increase; decrease QUESTION 2 2.1 Define Gross Domestic Product (GDP) and discuss the problems associated with GDP as a measure of an economy's total production This is th e total market or monetary value of allthe finished goods and services produced untry' s borders of a country within a specific time period, Gross Domestic Product isExplanation / Answer
10. During a recession, cyclical unemployment will increase and cyclical inflation will decrease.
So correct ans is d) increases; decreases.
It is so because during recession, the economic slow down and the demand fall due to which the production also falls which ultimately lead to reduce the employment or increases cyclic unemployment. And as people become more unemployment their purchasing power falls and the aggregate demand falls and as demand falls price falls, so the cyclic inflation decreases.
Question 2
The definition of GDP that you provided is correct.
The problem associated with GDp as a measure of economy's total production are :
1. GDP does not take into account leisure or human cost which lead to misleading result in the measurements of real income.
2.Barter and cash transactions that take place outside of recorded marketplaces are referred to as the underground economy and are not included in GDP.
3. GDP does not included those goods and services that are not exchanged in the market, for example food products produce for home and not sold in market are not included in GDp leads to misleading results in economy's total production.
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