What is the difference between nominal GDP and real GDP?

List at least five conditions that may result in market failure. 

 

2.3       What is the meaning of externality?

 

2.4       Give example of positive and negative externality, and explain in each case how it         results in market failure. 

 

2.5       If there is a negative externality, explain 

 

1. Possible private policy action to cure it, and
2. Possible public policy action to cure it.

 

 

PART III: NATIONAL INCOME ACCOUNTING

 

3.1       Why are national income and products account valuable? 

 

3.2       What are the components of the major categories in each of the two major ways         used in measuring national income and product account? 

 

3.3       What is the difference between nominal GDP and real GDP?