Problems relating to national income estimation, Microeconomics

Assignment Help:

Problems relating to national income estimation:

Changing prices of goods and services. Prices of goods and services do change from one period to another. This makes comparison of national income estimates from year to year difficult because the yearly estimates are in current prices of the various years (nominal terms)

Multiple or double counting: This is the problem of intermediate goods, intermediate expenditure and transfer payments. There is the likelihood of valuing, for example, both the corn and kenkey, counting expenditure on shoes as well as the leather that was used in making them and counting incomes earned not for productive activities (transfer payments)

Marketability of goods:- Since national income is the money value of goods and services produced in a given period, the problem arises in connection with goods and services that are not exchanged through the market.

Depreciation: - when capital is used in production, it wears and tears. To account for this, capital allowance must be deducted from the GNP to arrive at the NNP. A problem arises of accurately estimating depreciation. If care is not taken, national income will be overestimated or underestimated.


Inadequate statistical data: - one basic problem of estimating national income is the lack of statistical data. Individuals, as well as the businessmen, do not keep proper records of incomes, output, expenditure, etc.


Related Discussions:- Problems relating to national income estimation

., what total cost function yields a U-shaped average total cost function

what total cost function yields a U-shaped average total cost function

Brief overview on signs and symptoms, Project requirements: Refer to Table...

Project requirements: Refer to Table and answer the following questions for EACH organism listed above. Word requirements are outlined for each question - this represents a minim

What is development economics, What is development economics? Traditio...

What is development economics? Traditional economics studies the allowance of scarce resources among alternative uses. Development economics seems at the economic, politica

Market structers, what are the majotr sources of monopoly

what are the majotr sources of monopoly

Uses and habit forming commodity -price elasticity of demand, Uses and Habi...

Uses and Habit Forming Commodity -price elasticity of demand: The number of possible uses : A commodity has high price elasticity of demand (or elastic demand) if it can be p

Chamberline approach, a more simple explanation of the group equilibrium in...

a more simple explanation of the group equilibrium in the short and long run

Lending operations of world bank, Lending Operations of World Bank: Re...

Lending Operations of World Bank: Resources of the Bank consist of the capital and borrowings. The capital of the bank is contributed by its 184 member-countries. Besides,

Describe stabilisation policies as by the imf, Describe stabilisation polic...

Describe stabilisation policies as by the International Monetary Fund (IMF). Define stabilisation policies as basically a list of demands set forward by the IMF to a debtor nat

possibility production curve, how does the concept of possibility producti...

how does the concept of possibility production curve aplicable in real life?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd