ECS 1601 MEMO
QCTOBER /NOVERMBER 2017
SECTION A
QUESTION 1
(1a)
1. Taxes
2. Savings
3. Imports
(1b)
1. Low Unemployment
2. Balance of payment stability
3. Equitable income distribution
4. Employment
(1c)
Gross Domestic Product (GDP) – It is the total value of all final goods and services produced
within the boundaries of a country in a particular period (usually one year).
1. Gross National Income (GNI) – Measure of the national income of all residents in a
country
(1d)
Main differences between CPI and PPI
CPI PPI
Pertains to cost of living Pertains to cost of production
Basket consists of consumer goods and services Basket consists of goods only
Capital and intermediate goods excluded Capital and intermediate goods included
Prices include VAT Prices exclude VAT
Interest rates taken into account Interest rates excluded
Prices of imported goods not shown explicitly Prices of imported goods shown explicitly
QCTOBER /NOVERMBER 2017
SECTION A
QUESTION 1
(1a)
1. Taxes
2. Savings
3. Imports
(1b)
1. Low Unemployment
2. Balance of payment stability
3. Equitable income distribution
4. Employment
(1c)
Gross Domestic Product (GDP) – It is the total value of all final goods and services produced
within the boundaries of a country in a particular period (usually one year).
1. Gross National Income (GNI) – Measure of the national income of all residents in a
country
(1d)
Main differences between CPI and PPI
CPI PPI
Pertains to cost of living Pertains to cost of production
Basket consists of consumer goods and services Basket consists of goods only
Capital and intermediate goods excluded Capital and intermediate goods included
Prices include VAT Prices exclude VAT
Interest rates taken into account Interest rates excluded
Prices of imported goods not shown explicitly Prices of imported goods shown explicitly
