Further, people of foreign countries spend on the goods and services which a country exports to them. Why is it difficult to distinguish between frictional, structural, and cyclical unemployment? However the terms are used loosely. By estimating the proportion of women who smoke in the randomsample of 1000, a statistician can determine how likely the sampleproportion is close to the population proportion. Till now we have considered all three methods of calculating national income. The Planning Commission in India also keep in view the national income estimates before formulating the five-year plans.
The value that the measures of national income and output assign to a good or service is its market value — the price it fetches when bought or sold. However, since an output of one industry may be used by another industry and become part of the output of that second industry, to avoid counting the item twice we use not the value output by each industry, but the value-added; that is, the difference between the value of what it puts out and what it takes in. This is done by experts, who are creating models if there will be economic growth or not, how that will influence the business or even the countries. There are three main approaches to measuring National Income these are; 1. This means the activities are not reflected in the analysis even if their effect on the economy is strong. Statistics is primarily used either to make predictions based onthe data available or to make conclusions about a population ofinterest when only sample data is available.
The Role of Statistics in Astronomy It is impossible to take out a ruler and measure the distance of the Earth from the sun. For accurate and timely anti-inflationary and deflationary policies, we need regular estimates of national income. This is a useful information, if for example a country needs help, but the resources of the helping countries are relatively scarce limited , the country with the lowest national income would be more likely to get the most help from the other countries to get their economy going, built up an infrastructure or to get out of a trough. Imputed rent values of self-occupied houses should be included in the value of output. So when we talk about goods and services we are only talking about the final goods and services and not the semi processed, when we take the money value of all the goods and services produced within the domestic boundary on India only and to not other countries. Wages of labour, interest on capital, profit of enterprise and rent of land will be taken into account.
Expenditure on transfer payments by government such as unemployment benefits, old-age pension should also not be included because no goods or productive services are produced in exchange by the recipients of these payments. Definition of national income ………………………. Sociology uses statistics to describe, explain, and predict from data received. Instead, astronomers use estimates and mathematical theories to devise their best guess to just how far items in the universe are away from each other. National income is a measure of the total value of goods and services produced in a country over a given period, usually a year. Commerce Department in the 1930s, Kuznets had developed time series of national income in order to develop a quantitative basis for studying and measuring and the shifts in production from agriculture to industry to services. Income can be spent either on consumer goods or capital goods.
Imputed rent of self-occupied houses are included in national income as these houses provide services to those who occupy them and its value can be easily estimated from the market value data. Information on data for Israel:. Pakistan has a gross national. Long-delayed is of no use either in making policy or in monitoring the efficacy of policies already implemented. These include comparing countries, making economic forecasts, to improve government or business policies and actions or to understand if an organization has been successful in reaching its macroeconomic goals. As a result, President Barack Obama, after taking office in 2009, instituted an economic stimulus package in response.
In absence of any reliable data imputed value will have to be accepted. The expenditure method is based on the idea that all products are bought by somebody or some organisation. Some part of the output produced is consumed by their producers directly and never reaches to market. Sales of used goods and sales from inventories of goods produced in prior years are excluded, but the services of dealers, agents, and brokers in implementing these transactions are included. You can also use statistics in accounting to create projections for the next fiscal year. However, it is important to note that retained earnings of foreign enterprises owned by residents do not actually return to the residents concerned. It is through such estimates that we know the aggregate yield of the economy and lay down future economic policy for development.
Consumption of fixed capital i. It focuses on finding the total output of a nation by finding the total amount of money spent. The third step is to measure factor payments. Windfall gains such as prizes won, lotteries are also not included. All are specially concerned with counting the total amount of goods and services produced within the economy and by different sectors. .
In this method the value added by each enterprise in the production goods and services is measured. The quantitative information associated with national income accounting can be used to determine the effect of various economic policies. Data relating to product, expenditure, income investment, exports, taxation etc. National income estimates provide not only a single figure showing the national income, but also supply the detailed figures in regard to the various components of the national income. Illegal money such as hawala money, money earned through smuggling etc. .