What difficulties are encountered when determining the national income using output approach?

Difficulties are encountered when determining the national income using output approach.

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1. Goods in stock are difficult to value.

2. Problem of differentiating intermediate inputs from primary inputs.

3. A large subsistence sector that has no records.

4. Double counting of output at different levels of production.

5. Illegal activities that bring output are included in the measurement.

6. Price fluctuations affect valuation of output.

7. Inadequate output data.

8. Deciding on which goods and services to include in measuring national income is a problem.

9. Inaccurate data/information.

10. Problem valuing government output as it is not sold in the market.

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raphael answered the question on January 6, 2017 at 13:50

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