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The CSO calculates the level of National Income in Ireland and three methods are used to calculate it: the income method, the output method and the expenditure method - Leaving Cert Economics - Question 7 - 2019
Question 7
The CSO calculates the level of National Income in Ireland and three methods are used to calculate it: the income method, the output method and the expenditure metho... show full transcript
Worked Solution & Example Answer:The CSO calculates the level of National Income in Ireland and three methods are used to calculate it: the income method, the output method and the expenditure method - Leaving Cert Economics - Question 7 - 2019
Step 2
Explain any one of the three methods used to calculate national income.
Answer
Income Method
This method adds up all the income earned by the factors of production within an economy over a specific period of time. It includes wages, profits, rents, and interests received by individuals and businesses in the economy.
Step 3
State and explain two reasons why it is important to calculate the level of National Income in a country.
Answer
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Indicates changes in the level of economic growth/standard of living: The national income figure provides crucial insights into the economic growth of a country. A rising national income indicates improvement in the standard of living over time.
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To help formulate government economic policy/evaluate government priorities: Accurate national income statistics inform and assist governments in choosing appropriate economic policies, ensuring that they can respond effectively to the needs of the country.