Since decades, national income has remained the most significant notion in the economic world that plays a crucial role in deciding the status of a nation economically. For this purpose, calculation of the national income is an imperative process that involves various approaches…
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One of the most common problems that countries, especially developing countries face in this process is lack of expertise, as the methodology involves need highly professional experts, economics, and analysts that may complete the process in an accurate manner while eliminating as much human errors as they can (Bosch, pp. 11-14, 1992). However, a huge number of countries are experiencing shortage of such qualified individuals. Besides, lack of technical equipments is also significant issue exists in this methodology, as many countries do not have access to advanced technologies required for the calculation.
Thirdly, determination of depreciation is a complicated step in the process that creates problems for economists. One of the basic reasons behind this is the characteristic of depreciation being estimation rather than an accurate deduction that results in inaccurate figures of the national incomes (Dombusch, pp. 23-25, 2005). In addition, experts (Jain, pp. 52-57, 2008) have identified another problem that relates to decisions regarding inclusion and exclusion of certain products and services. In specific, economists face confrontations while deciding to consider government spending on social welfare, development expenses, interests against debts, etc that often results in wrong calculation of the national income.
Moreover, experts (Wall, pp. 39-42, 2008) have noticed that globalization has resulted in existence of huge number of foreign organizations working in a country, and economists face difficulties while determining whether to include income of such companies in their national income or not. However, the IMF has played a vital role in suggesting that economists should include income, as well as production activities in the owning country while ignoring the profits that should go in the national income of the parent country. Furthermore, studies (Jain, pp. 39-41, 2008) related to the calculation of national income have shown that
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“Problems in Calculating National Income Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/miscellaneous/1562056-problems-in-calculating-national-income.
However, there is a line drawn somewhere to the length to which GDP can be measured as an indicator for the well being of a nation or the kind of happiness that is contained within the nation. The reasons for the same have been discussed in the paper to great length, the ultimate answer to the question being that GDP is not the only key aspect that helps in measuring the welfare or happiness of a nation and that there is more to that.
With the help of this method, the economists can interpret the living standard of a particular economy or country (Mankiw, 2011). This method of using national income accounts for evaluating the performance of the economy and interpreting the standard of living have some limitations.
In view of this trend, critically examine the role of large corporations in this process and show how price of output decisions by cartels has contributed to this problem.'' Income inequality is the extent of income concentration within a country or group (Ghanei, 2013 [class notes]).
165). It has a strong impact on the national income of the nation whose currency is affected. It can be achieved in many ways (Abbott & De Vita 2011) – however this is not within the scope of this article. In this article, an attempt is made to clearly discuss the impact of currency appreciation on the national income of a nation.
This equation also shows that the spending in an economy is not only comprised of domestic spending: if output exceeds domestic spending, the country exports the difference and net exports is positive; however, if the output falls short of domestic spending, the country is expected to import the difference and net exports is negative.
ints of the economic depression are not ended yet, organizations are becoming aware of the fact that they will have to take steps to maintain their staff (Kumar, 2014, p. 98). This could be by means of an enhanced stress on developmental programs or by means of investing in
Moreover, this should be in line with the planned aggregate supply, which is equal to planned aggregate demand. However, aggregate expenditure play a much greater role in determining the equilibrium price as compared to the aggregate
In relation to the investing section, the capital expenditure or spending can be duly considered as the most significant item reported by both of the selected companies, as this signifies procuring or improvising the long-term assets that help in determining long-term impacts on their own businesses.
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