1. Define nominal and real GDP. Are these flow or stock concepts? Explain why the differences between nominal and real GDP are important

2. Define the implicit price deflator. Where does this concept come from? How does it relate to nominal and real GDP? How does the implicit price deflator differ from the consumer price index (CPI)?

3. We discussed alternative views of GDP from the perspectives of expenditure, income, and production. What are the basic differences in these approaches? Why do they add to the same total for GDP?

4. What are some of the shortcomings of real GDP from a welfare perspective? Do you have any practical suggestions for revising the computation of GDP to achieve a better measure of welfare?