Activator230822
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It excludes crucial services that contributes to national income but not paid for like government services and self employment.
It difficult to make a decision about the goods and services to include in this measure.
Some activities considered illegal generates a lot of income but are not included in the measure of national income.
Difficult in valuing stock at the end of the accounting year as this differs with their value at production.
Difficult in determining the increase in value as a result of increasing volumes of output. Final price is usually affected by market forces
Difficult in deciding on the value to use when making records- The value keeps changing in line with market forces.
It is also difficult to determine the value of depreciation hence failure to record accurately the value of capital goods.
So when the output approach is used in measuring the national income it really leads to the cause of the outline predicaments above.
It difficult to make a decision about the goods and services to include in this measure.
Some activities considered illegal generates a lot of income but are not included in the measure of national income.
Difficult in valuing stock at the end of the accounting year as this differs with their value at production.
Difficult in determining the increase in value as a result of increasing volumes of output. Final price is usually affected by market forces
Difficult in deciding on the value to use when making records- The value keeps changing in line with market forces.
It is also difficult to determine the value of depreciation hence failure to record accurately the value of capital goods.
So when the output approach is used in measuring the national income it really leads to the cause of the outline predicaments above.
