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a) Why is it important to estimate National Income of a Country? What difficulties do economists encounter while carrying out such a task particularly in developing countries?
b) The table below represents economic transactions for country XYZ in billions of shillings:
Total output Intermediate purchases
Agriculture 30 10
Manufacturing 70 45
Services 55 25
Required:
i) Calculate the Gross National Product of this economy using the value added approach.
ii) If depreciation and indirect taxes equal 8 billion and 7 billion shillings respectively, find the Net Domestic Product both at Market prices and at factor cost.
c) Briefly explain the multiplier and accelerator principles.
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