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What are the difficulties involved in the measuring of National Income

What are the difficulties involved in the measuring of National Income

Answers

Dana
1. Incomplete Information.
some important information may not be available or may be inaccessible.

2. Danger of double counting.
Costs of raw materials (intermediate goods) may be included in national income accounting.

3. Unpaid services.
Services that people do for themselves and others that are not paid for are usually excluded from national income accounting.

4. Depreciation.
Replacement costs for worn out parts may not be considered.

5. Inventory valuation.
There are many methods that can be used and each may give different results.

6. Changes in the value of money.
Changes in the market prices (value) of final products due to inflation may result into changes in the measure of national income even if real output may not have changed.
Dana05 answered the question on July 18, 2019 at 19:44

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