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A newly industrialized country with a population of 40 million people, had its national income estimates during the year 2009 as follows: ...

A newly industrialized country with a population of 40 million people, had its national
income estimates during the year 2009 as follows:
Value in Kshs (million)
Exports 250000
Consumption expenditure 624000
Investment 300000
Government spending 416000
Imports 210000
Depreciation 10000
Net indirect taxes 50000
Required:
(i) Calculate the GNP per capital of the country
ii) Outline limitations of using GNP pr capita in measuring the standard of living of accounts

Answers

Kavungya
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ii) Limitations of using GNP per calite in measuring the standard of living in a country
- National income and wealth is never equally distributed among residents of a country
- Material welfare of people cannot be measured on mathematical scale in the same way as per
capital GNP
- Wants and tastes of living people in a country are never exactly the same
- Prices of products in different parts of the country do vary leading to different costs of living
- The purchasing power of people is sometimes lowered through taxes and increased through
subsidies
- Sometimes an increase in quality of output is achieved through a decrease in product quality
- Sometimes arise in production is realized through stressful, dangerous and unpleasant working
conditions
Kavungya answered the question on April 4, 2019 at 07:23

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