10 Major Problems in Measuring

National Income
The following points will highlight the six major Problems in Measuring or calculating National
Income. And the national income accountants have to face certain problems associated with the
valuation of inventories. In the National Income and Product Accounts, these owner-occupiers are
viewed as being in the business of renting their homes to themselves. So expenditure on the
purchase of a smuggled camera is not final expenditure and is thus not a part of national income.
Capital gains are also a form of transfer payments and are, therefore, excluded from national
income. We have already noted how inventories are to be treated in national income accounts.
Thus, if an individual receives $ 20,000 from his father who is a non-resident Indian, it will be part of
India's national income

THE CHALLENGE OF TOTAL FACTOR

PRODUCTIVITY MEASUREMENT
However, it is difficult to define what we mean by knowledge capital and the related concept of
innovation. Knowledge capital, in particular, is important for understanding precisely how process
and product innovations are generated and diffused.inputs inputs that are utilized by the industry
but which are produced by other industries. The problems involved in measuring capital input are
also being addressed by the Canberra Group on Capital Measurement, which is an informal working
group of international statisticians dedicated to resolving some of these measurement problems.
Information on the real and nominal purchases of intermediate inputs by industry comes from the
system of input-output tables published by Statistics Canada. Some of the possible input- output
combinations that a production unit can produce are imbedded in its capital equipment and the
accompanying manuals.