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NATIONAL INCOME - Coggle Diagram
NATIONAL INCOME
USES OF NATIONAL INCOME
Standard of living indicator
reflects the individual's welfare.
can measured bu GDP per capita
more good and services, higher the increase in consumption opputunities
Government planning and policies
can guide policymaker in planning for the future
view historical trend and perfomances
can take necessary measures to improve the current level of economy
Sectoral contribution
primary sector
agriculture, forestry, mining
secondary sector
manufacturing and constructions
tertiary sector
electricity, gas and water
policymaker can recognize which sector has a potential
International comparisons
make international comparisons of people 's of living standards or real income
PROBLEM OF MEASURING NATIONAL INCOME
Problem of non monetized
the existences of a large number of non monetized , make computation of national income more challenging
Underground economy
transaction contributing to production, not reported
causing GDP underestimated
Non market transaction
no payment
no transaction recorded
Problem of expertise and modern machinery
lack of professional
non availability of modern machinery
Problem of double counting
will appear when both value of final good and intermediate are include
to avoid it, the GDP include only value of final good and ignore intermidiate