The quality of labor depends upon intelligence, training, which in turn decides the volume of industrial productivity. Marxian economists are of the belief that services should be excluded from national income, most other economists though are in agreement that services should be included.
Such comparisons are useful. By Mary Hall Updated June 11, — 3: Countries with higher GDP may be more likely to also score highly on other measures of welfare, such as life expectancy.
Factor — Income Method This method refers to the gross national income obtained by adding together wages and salaries, interests, profits and rents of persons and institution and including government incomes are earned either from property or through work.
Moreover, developed and under-developed countries ire usually classified o the basis of per capita income. Individual get pension and interest on public loans, but these payments creates difficulty in the measurement of national income. But, it is very difficult to distinguish between final goods and intermediate goods and services.
A number of intelligent guesses have to be made and used for this purpose. The quantity of labor has double influence since labor is both a factor of production as well as the consumer of what is produced.
But in underdeveloped countries this method may give rise to various problems like imputation of money values to no-monetized sector.
Although some attempts were made to estimate national incomes as long ago as the 17th century, the systematic keeping of national accounts, of which these figures are a part, only began in the s, in the United States and some European countries.
However, measurement of national income is subject to limitations all over the world but these limitations are more serious in developing countries than in developed countries. Political stability The key to increase the national income rests with important factors like capital formation, natural resources, technical know-how and political stability.
Only final goods and services should be included in the national income accounting. Additional payments made in kind may not be included in national income. For national Income, the net result of external transactions is adjusted to the total. Exports of goods and services like insurance, banking, tourism, gifts, foreign investment income, are added and imports are deducted to get national income.
Similarly, the impact of economic activity on the environment is not measured in calculating GDP. Real per capita GDP adjusted for purchasing power parity is a heavily refined statistic used to measure true income, which is an important element of well-being.
In many developing nations, there is this issue that goods and services are traded through barter trade. Factor incomes are those paid in exchange for factor services like wages, rent, interest etc.
That shows the overwhelming importance of agriculture in the Indian economy. It is both the figure of national income and the details regarding its various constituents that throw light on the functioning and performance of the economy. Due to the nature of lifestyle in most of the developing countries these limitation has almost be unavoidable.
The market prices are deeply influenced by: C; Money expenditure at market prices are computed and added and these include the private consumption expenditure, direct tax payments, payment to nonprofit organization and private savings.
In every country there is a body which is responsible for keeping the national accounts and produces statistics through them.National Income Essay Sample INTRODUCTION This paper aims at providing a detailed discussion on the concept of national income and challenges that are faced by developing countries in the measurement of their national income.
The national income statistics show that the USA has the highest standard of living; this can be proved by looking at the gross national income of The United States, which is $12, million, and the gross national income per capita which is $43, This figure is over times the income per capita of Tanzania which is $ Real income per capita is an inaccurate and insufficient indicator of living standards For many economists, there is a growing disconnect between GDP and wellbeing National income data can be used to make cross-country comparisons.
National Income Standard Of Living new topic usefulness of national income statistics new topic limitation of [THE IMPACT OF LOBBYING ON STANDARD SETTING IN ACCOUNTING] Abstract In this essay, the impact of lobbying on standard setting in accounting is critically evaluated and discussed. living standard.
Income earned by workers. National Income Statistics and Standard of Living The national income statistics show that the USA has the highest standard of living; this can be proved by looking at the gross national income of The United States, which is $12, million, and the gross national income per capita which is $43, Economics Prep 3 Complete Paper 1 Essay Question: Q1 A and B page A) Explain three uses of national income statistics B) Evaluate the use of GDP figures as a means of comparing countries.
A) National income (total net value of all goods and services produced within a nation over a specified period of time) statistics have many different uses.Download