0 votes
in Revision by
What are the problems associated with expenditure approach method in measurement of national incomes?

1 Answer

0 votes
by (57.6k points)

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.
...