NATASSHA JAMIL 2011890784 AS2243B

NON-MARKET TRANSACTION - excludes unpaid activites which didn't take place in any market. Eg: carpenters who repair their own home. DOUBLE COUNTING

- some intermediate products traded few times

- national income overestimated Eg: value of complete car is including value of tyres, some cases the value of tyres might be counted again.

UNDERGROUND ECONOMY - transaction that are not reported such as gambling and illegal drugs. - government only estimating their value.

PROBLEM IN CALCULATING NATIONAL INCOME

INADEQUATE INFORMATION - Some data might incorrect and incomplete. - underestimated national income Eg: firms that avoid paying taxes by changing the value of their incomes COMPOSITION AND DISTRIBUTION OF OUTPUT - not provide information whether the output is well distributed or not. Eg : does not means the society well-being improved even there increasing of GDP.

THE EXTERNALITIES
- by product that produce during the process such as dirty air, toxic waste, pollution are reducing quality of life but not being deducted in national income figures.