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What problems may a country encounter when measuring national income using the output approach?

Discuss the problems that a country may encounter when measuring national income using the output approach.

Answers

Maurice
(i) The problem of deciding on the goods and services to include for example, whether the output of a wife should be included or not.

(ii) The problem of valuing output in the subsistence sector.

(iii) The problem in differentiating primary inputs from intermediate inputs.

(iv) Valuing illegal activities like drug trafficking and smuggling.

(v) The problem of valuing government output since many of its services are not sold in the market.

(vi) The problem of valuation due to non-availability or inaccuracy of the output figure especially in the private sector.
maurice.mutuku answered the question on July 6, 2017 at 06:47

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