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What are the problems associated with expenditure approach method in measurement of national incomes?

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Problems associated with expenditure approach method in measurement of national income include;

  • No accurate records for expenditure are kept especially in the private sector.
  • Expenditure for the subsistence sector can only be mere approximations are due to lack of records in the sector
  • Differentiating between final expenditure and intermediate expenditure may be difficult.
  • It suffers the problem of double counting
  • Fluctuating exchange rates may pose challenges especially in valuation of exports and imports.
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