The CSO estimates the National Income for Ireland - Leaving Cert Economics - Question 5 - 2009

The three methods used to estimate National Income are:

1. Income Method: This method calculates the total income earned by the factors of production.
2. Output Method: This method calculates the total output produced in the economy.
3. Expenditure Method: This method calculates total expenditure on the nation's goods and services.

One benefit of using three methods instead of just one is Accuracy. By using multiple methods, the results can be cross-checked, leading to a more accurate and reliable estimate of National Income.

Each of the letters/symbols in the formula Y = C + I + G + X - M represents the following:

• C: Consumption (€1,500m)
• I: Investment (€600m)
• G: Government spending (€700m)
• X: Exports (€150m)
• M: Imports (€250m)

To calculate National Income (Y), we can substitute the values into the formula:

Thus, the level of National Income is €2,700m.

The initials GNP stand for Gross National Product.

The decrease in GNP per person may have several economic effects on citizens:

1. Lower Standard of Living: A decrease in GNP often means that individuals will have less income to spend on goods and services, leading to a reduced standard of living.

2. Increased Unemployment: Reduced economic activity can cause businesses to cut back on expenses, potentially leading to job losses and increased unemployment rates.

3. Reduced Savings: With a lower GNP, disposable income decreases, which means individuals may have less capacity to save for future needs, leading to financial insecurity.

To encourage economic activity, the government could:

1. Increase Government Spending: By investing more in public services and infrastructure, the government can stimulate economic growth and create jobs.

2. Provide Subsidies to Increase Employment: Offering grants or subsidies to businesses could incentivize them to hire more staff and invest in their operations, boosting economic activity.