This question was not popular among candidates. The candidates that attempted it could not really distinguish between GDP and GNP, their understanding the other concepts was quite poor, hence they were unable to score maximum marks. Few candidates that attempted this question scored below average marks. These candidates were expected to give the following answers to score good marks:

(a) Gross Domestic Product (GDP): This is the total market value of final goods and services produced in a country at a particular period of time. In calculating the GDP of a country, no account is taken of the nationality of those that produce the goods and services. GDP is used in determining whether the country concerned is experiencing economic growth, decline or stagnation.

(b) Gross National Product (GNP): GNP is defined as the total market value of final goods and services produced in a country over a given period of time including the net income from abroad. Basically, GNP measures the value of final goods and services that the country's citizens produced regardless of their location.

(c) Cost of living: Cost of living is the general price level of goods and services that determine how much an average household needs to meet the basic necessities of life. It is measured in terms of price index. If the price level increases, the cost of living increases and the standard of living falls and vice versa.

(d) Per capita income is the national income of a country divided by her total population. It gives the average income in a country and it serves as an economic indicator of the standard of living and development.

(e) Standard of living: The standard of living indicates the volume of available goods and services at the disposal of individuals and therefore shows the level of their welfare. It is measured by per capita income. There is an inverse relationship between standard of living and cost of living.