Categories: Economics

Difficulties in the Measurement National Income

&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad1" id&equals;"quads-ad1" style&equals;"float&colon;left&semi;margin&colon;0px 0px 0px 0&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;<p>The sale and purchase of stocks in the secondary market doesn’t generate any economic activity&comma; these transactions are just transfer of ownership&period; National Income goes over-estimated by including these transactions in national income computation&period; The result cannot depict true results&semi; therefore to measure NI such transactions should be excluded&period;<&sol;p>&NewLine;<h3>Government Transfer Payments<&sol;h3>&NewLine;<p>Government is an important player of three sector economy and its payments to  public without rendering services are considered as non productive payments&comma; theses are known as transfer payments e&period;g&period;&comma; payment of social security&comma; unemployment allowances&comma; pensions or scholarships to the students&period; All Such transactions make the NI calculation complicated&period;<&sol;p>&NewLine;<p>&lbrack;adsense&rsqb;<&sol;p>&NewLine;<h3>Private Transfer Payments<&sol;h3>&NewLine;<p>In addition to government transfer payments&comma; there are private transfer payments e&period;g&period;&comma; dowry&comma; charity and pocket money&period; As these payments are rewarded without any productive service so including such type of nonproductive expenditure in the national income will not give the true picture of NI&period;<&sol;p>&NewLine;<h3>Sale of Used Goods<&sol;h3>&NewLine;<p>The trading of second hand commodities like car&comma; TV&comma; or refrigerator cannot be counted for the current year NI as these products were included in the NI when sold first time as new finish goods&comma; there will be duplication if counted again&period;<&sol;p>&NewLine;<h3>Reliable Statistics Availability<&sol;h3>&NewLine;<p>National Income measurement is a complicated and delicate process&period; The availability and processing of data is a sensitive issue&comma; especially in developing countries availability of exact figures are difficult which makes the calculation of accurate NI very complex&period;  In National Income measurement the value of all finish goods from all factors of production is calculated carefully by keeping all the constraints in mind&period;<&sol;p>&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad2" id&equals;"quads-ad2" style&equals;"float&colon;none&semi;margin&colon;0px 0 0px 0&semi;text-align&colon;center&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad3" id&equals;"quads-ad3" style&equals;"float&colon;none&semi;margin&colon;0px&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;

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