Though, in reality, both the individual worker and the country are losers on account of the shifting of residence of this worker, national income estimates record the additional resource cost as an addition to national income.
The quality of labor depends upon intelligence, training, which in turn decides the volume of industrial productivity. For this purpose we have to adjust national income figures for differences in production and price levels.
Further, by comparing the per capita income over years, we can know the changes in the standards of living and economic welfare of the people. In many developing countries there are also serious problems regarding the reliability of information to be used in estimating national income.
Under such circumstances it is very difficult to trace out the main source of earning of an individual. Many goods can be justified as intermediate as well as final goods depending on their use.
Political stability The key to increase the national income rests with important factors like capital formation, natural resources, technical know-how and political stability. It is more useful in context of planning and formulation of realistic plans.
Get Full Essay Get access to this section to get all help you need with your essay and educational issues. The following are some of the important uses of national income estimates: However, there are serious limitations to the usefulness of GDP as a measure of welfare: In every country there is a body which is responsible for keeping the national accounts and produces statistics through them.
A number of intelligent guesses have to be made and used for this purpose. But it is not helpful in revealing distribution of income in the society. For example, if everyone worked for twice the number of hours, then GDP might roughly double, but this does not necessarily mean that workers are better off as they would have less leisure time.
Value of all the products finally disposed of are computed and added to get total national expenditure.
GDP is divided by population to determine personal income, adjusted for inflation with real GDP and adjusted for purchasing power parity to control for the impacts of regional price disparities. These earnings are a part of individual income and they are also a part of government expenditures.
Such comparisons are useful. There are large numbers of petty producers and it is difficult to include their production in national income because they do not maintain any account.
Additional payments made in kind may not be included in national income. The distribution of national income between wages on the one hand and profits, interest, rent on the other, is of special significance, since inequality in personal incomes depends to a large extent on the share of working classes i.
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.
Nanda Since, these incomes are not included in the national income, the national income seems to be less than the actual amount as they are not included in the accounting.
Such goods and services should be included in accounting of national income, but the absence of data makes this inclusion difficult.
For national Income, the net result of external transactions is adjusted to the total.
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. The difference between final goods and services and intermediate goods and services depends on the use of those goods and services so there are possibilities of double counting.
Errors and Omissions - this is a problem in collecting and calculating statistics.
In case the economy is growing, we can also judge the rate of economic growth or development by measuring the rate of increase in national income. 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.
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, 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 $ National income statistics give us much information about how a nation’s economic growth and related objectives such as: quality of life, standard of living of one country compared to another.
In this essay, I have a closer look in measuring national income and its significance on a nation’s well-being. 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,National income statistics and standard of living essay