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Difficulties in the Measurement National Income

Difficulties in the Measurement National Income – There are many difficulties in measuring national income of a country correctly. The difficulties are of two types in nature conceptual and statistical. Some of these difficulties/problems are – (1) Non-monetary Transactions – The first problem is related to the non-monetary transactions such as the services of theContinue reading “Difficulties in the Measurement National Income”

Expenditure Method of Measuring National Income

GDPMP = Final Private Consumption Expenditure + Final Government Consumption Expenditure + Gross Domestic Capital Formation + Exports – Imports
GDPMP = C + G + I + (X – M)
After subtracting depreciation (consumption of fixed capital) from Gross Domestic Product at Market Prices (GDPMP) we get Net Domestic Product at Market Prices (NDPMP).

Value Added Method of Measuring National Income

Value Added Method of Measuring National Income – Value Added Method is also called Output Method or Production Method. In this method, the economy is divided into different industrial sectors such as agriculture, mining, construction, communication, transport, manufacturing, trade and commerce and other services. Then the net value added at factor cost (NVAFC) by eachContinue reading “Value Added Method of Measuring National Income”

Fiscal Policy, Equitable Distribution of Income and Price Stability

Fiscal Policy and Equitable Distribution of Income – Existence of inequalities is a social evil and no measure of economic development can increase welfare unless an equitable distribution of income or national product is assured. Taxation can be used to bring about a redistribution of income in favor of the poorer sections of the society.Continue reading “Fiscal Policy, Equitable Distribution of Income and Price Stability”

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