Answer Happy

(a) [20] Explain why the output, expenditure and income measures of GDP are, in principle, equal. What are the components of each of these measures? (b) [20] How is the government expenditure component of GDP measured? Explain the role of “transfer payments” like payments of pensions or debt interest on government expenditure and GDP. (c) [20] During the COVID-19 pandemic the UK government had a “furlough” scheme by which it subsidised the income of those who were not able to work. What effect did this have on the output income and expenditure components of GDP? (d) [20] Discuss the argument that closing schools and pubs during the pandemic was a bad idea because it not only reduced output and thus GDP but it also reduced well being (e) [20] The recent Dasgupta Review argues that to rebalance our planet's natural systems, we must “include Nature as an ingredient” when judging the economic health of nations. Discuss the limitations of GDP in this respect and how one might include Nature as an ingredient.