Economics
Question One
Tragedy of commons refers to the exhaustion of a common resource that is shared by many people without considering that the abuse or overuse of the resource in turn affects their long-term interests (Taylor, 2008). Common resources amongst people may include among others forests, wildlife, fisheries and ranges. The best way to avoid the tragedy is to privatize the commons. Another possible way of avoiding is by keeping the common resources as public property where the rights of entry and use are held. Commons tragedy is unavoidable unless the common resources shared by numerous people are turned into private property or unless the government regulation of users and uses is enacted. Once a resource has been made private, it is possible for the owner to take responsibility over it and observe a way in which people shall be accessing it. The same happens when the government is in charge. There shall be a coordinated manner in which the resource is used. This will in turn prevent exploitation of the resource, which would have led to the tragedy of commons.
Question Two
Nominal Gross Domestic Product (GDP) is the market value of the final goods and services produced in a region while real GDP is the inflation-adjusted measure that reflects the value of goods and services produced in a particular year (Taylor, 2008). Real GDP or GDP at constant times would be the best approach to use when assessing economic growth over time. Real GDP uses current prices to measure the years output. It also calculates the GDP for a longer duration of time as compared to the nominal GDP. Real GDP produces exact results while the use of nominal might mislead by raising the GDP figure higher than it should be because the inflation is not accounted for. Using the real GDP in assessing economic growth assures accountancy of changes in the price levels and gives a more reliable and accurate figure than the nominal GDP.
Reference
Taylor, J. B. (2008). Economics. Boston, Mass: Houghton Mifflin.
