national income date

Question 1

national income

Answer 1

measured the monetary value of the flow of goods in and out of the economy in a period of time

Question 2

limitation of NI date to compare countries

Answer 2

no indication of distribution of income
may need to be recalculated in terms of purchasing power due to price differences
large hidden economies e.g. black market
no indication of welfare

Question 3

ppp

Answer 3

theory that estimates how much EXR needs to be adjusted so exchange is equivalent according to each countries purchasing power

Question 4

ppp example

Answer 4

if care £15,000 and £1.50=$1 then the car would cost $10,000 so both cars cost the same in US dollars

this helps to minimise misleading comparisions