Question

Explain five limitations of using the product method in measuring National Income of a
country

Answer 1

Answer:

Explanation:1.national in cuve figure are not accurate.

2.the black money desorts the figures. this is the name given to work tat is not reported to the authorities.

3.a rise in national income may not mean a rise in living standards.this is because the rise may occur as a result of increased spending on items such as defence,which do not improving living standards.

4.the account only measures paid activities.they,therefore,exclude do-it-yourself activities and the work of housewifes.if over a period of years ,there is a rise in such activities,then ,this will not be shown in the official figures and comparisons over several years will be inaccurate.

5.national income often rises in time of war,ot the threat of war,because money is spent on weapons,this will push up gdp,but the people may be acutely shorts of good to buy.