This question attracted few candidates who performed below average. The question required the candidates to compute GDP, GNP, NNP at market prices, NNP at factor cost in the (a) part, per capita income in the (b) part and to identify any four problems associated with method of measuring national income in the (c) part. Most of the candidates could not identify the items in the table meant to be computed under concepts (i) – (iv).This prevented them from obtaining the maximum mark.
The candidates were expected to provide the following answers to score higher marks.
a) Manufacturing…………………………………………. 840.00
Mining…………………………………………………. 420.00
Agriculture…………………………………………….. 350.00
Construction…………………………………………… 200.00
Commerce……………………………………………… 100.00
Utilities………………………………………………… 150.00
Transport and storage services…………………………. 300.00
(i) Gross Domestic Product at market price………………. $ 2,360.00 m
(ii) GNP at market prices = GDP + Net factor income from abroad
= $ 2,360m + $ 180m
= $2,540.00m
(iii) NNP at market prices = GNP – Depreciation
= $2,540m - $90 m
= $2,450.00m
(iv) NNP at factor cost = NNPmp + Subsidies – Indirect Taxes
= $ 2,450m + $ 100m – $ 80m
= $ 2,470.00m
(b) Per Capita Income = Net National Product (fc)
Total Population
OR National Income
Population
NNP at factor cost = $ 2,470.00m
50,000
= $49,400.
(c) Problems of the Product approach
- Problem of double - counting.
- Subsistence production.
- Domestic activities.
- Effects of inflation /changes in inventory.
- Difficulty in estimating depreciation.
- Inaccurate statistical data.
- Illegal/underground activities.
