Highlight five reasons why the output approach underestimates the gross domestic product

      

Highlight five reasons why the output approach underestimates the gross domestic product

  

Answers


Kavungya
-Inaccurate figures / unavailability of output figures leading to undervaluation
-Lack of data from the subsistence sector leading to lower GDP,
-Undervaluation of government output as many of its services are not marketed.
-Overestimation of the value of depreciation leading to lower GDP,
-Inventory reevaluation / value of stock work in progress may be undervalued,
-Illegal output not being counted – drug trafficking smuggling / black market output not valued,
-Problem of products to include – some outputs may not be captured e.g. of housewives.
-Accounting for inflation as the rate used may not be sufficient
Kavungya answered the question on October 11, 2019 at 08:44


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