Identify the likely problems that can be encountered in the compilation of National Income Account...
Identify the likely problems that can be encountered in the compilation of National Income Account in Nigeria.
Explanation
Problems of National income measurement and compilation:
(i) The technical expertise, which is an essential element for collecting and analyzing data, is insufficient.
(ii)Some goods can be counted twice and this gives false national income estimates.
(iii) The predominance of Nigerian economy by subsistence farming makes estimation difficult.
(iv) The national income figures can be over or under estimated as a result of inflation or deflation.
(v) Some services are not easily quantified thereby affecting the National income estimates, e.g. House wives' services.
(vi)It is very difficult to estimate the value of net income from abroad. This is because many individuals may be involved, hence making accurate assessment impossible.
(vii) National income estimates will be affected by the valuation of depreciation on capital stock.