1. What are the two major differences between the CPl and the GDP deflator index?(5 marks)2. Define private saving, public saving, national saving, and investment. How arethey related? (5 marks)3. Give an example of an event that would shift the aggregate-demand curve. Whichway would this event shift the curve? (5marks)4. a. What are the four expenditure components of Gross Domestic Product (GDP)?Explain each of these. (10 marks)B. Define real GDP and nominal GDP. Which is a better measure of economicwell-being? (10 marks)5 a) Explain briefly what the consumer price index measures and how it isconstructed. (10 marks)b) Describe the three problems that make the consumer price index an imperfectmeasure of the cost of living. (10 marks)

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ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

1. What are the two major differences between the CPl and the GDP deflator index?
(5 marks)
2. Define private saving, public saving, national saving, and investment. How are
they related? (5 marks)
3. Give an example of an event that would shift the aggregate-demand curve. Which
way would this event shift the curve? (5marks)
4. a. What are the four expenditure components of Gross Domestic Product (GDP)?
Explain each of these. (10 marks)
B. Define real GDP and nominal GDP. Which is a better measure of economic
well-being? (10 marks)
5 a) Explain briefly what the consumer price index measures and how it is
constructed. (10 marks)
b) Describe the three problems that make the consumer price index an imperfect
measure of the cost of living. (10 marks)

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