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    National Income Accounting can be observed through the circular flow of the economy. There are difficulties in measuring national income such as non-monetary transactions, government incomes, and incomes from illegal activities. National income can be measured through the product method, income method, or expenditure method. Problems in measurement include capital depreciation, differences between market prices and factor costs, and calculating net factor incomes from abroad.

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    National Income Accounting can be observed through the circular flow of the economy. There are difficulties in measuring national income such as non-monetary transactions, government incomes, and incomes from illegal activities. National income can be measured through the product method, income method, or expenditure method. Problems in measurement include capital depreciation, differences between market prices and factor costs, and calculating net factor incomes from abroad.

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    Download as PPTX, PDF, TXT or read online from Scribd
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    15 views6 pages

    National Income Accounting

    Uploaded by

    sachinthorat84
    National Income Accounting can be observed through the circular flow of the economy. There are difficulties in measuring national income such as non-monetary transactions, government incomes, and incomes from illegal activities. National income can be measured through the product method, income method, or expenditure method. Problems in measurement include capital depreciation, differences between market prices and factor costs, and calculating net factor incomes from abroad.

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    of 6

    National Income Accounting

     Presented by :-

    Vinayak Wakchoure 44
    Bhavik Doshi 48
    National Income Accounting

     Meaning :-

    NIA can be observed from the


    circularflow that production creates
    income, income generates spending and
    spending induces production.
    DIFFICULTIES IN THE MEASUREMENT
    OF NATIONAL INCOME

     Treatment of Non- Monetary Transactions


     Government Incomes
     Income from illegal activities
     Depreciation
     Imputed Values
    MEASUREMENT OF NATIONAL
    INCOME

     Product(Output) or Value Added Method

     Income Method

     Expenditure Method :-
    National income = consumption exp + invest
    exp + govrt exp + (export - import)
    PROBLEMS IN MEASUREMENT
     Capital Depreciation

     Market prices and Factor cost

    Net factor incomes from abroad :-


    NFI from abroad = R – P
    Where, R = Income received by domestic factors for their
    contribution to production abroad
    P = Income paid to the foreign factors for their
    contribution to production in the domestic economy.
    Thank
    You

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