Explain Three Uses of National Income Statistics - 807 Words

Economics Prep 3 Complete Paper 1 Essay Question: Q1 A and B page 169 A) Explain three uses of national income statistics B) Evaluate the use of GDP figures as a means of comparing countries. A) National income (total net value of all goods and services produced within a nation over a specified period of time) statistics have many different uses. It is for example used as a comparison scale between countries. This is a useful information, if for example a country needs help, but the resources of the helping countries are relatively scarce (limited), the country with the lowest national income would be more likely to get the most help from the other countries to get their economy going, built up an infrastructure or to get out of†¦show more content†¦Nicolas Heinzinger Economics Prep 3 B) In my opinion the use of GDP for comparing different countries is not a good thing. And I am going to show why in three points. First of all, people are more likely to live or to work in a country with a higher GDP. Therefore all the people who are living in a country with a small GDP, are going to leave the country, that means the local economy will slow down. That means the GDP will be even smaller and even more people are leaving the country, because they see better opportunities in a country with bigger GDP, for example Turkey-Germany. But this influences also the country where the people are going. The foreigners are more likely to work for lower wages, so they are more likely to be employed. Therefore the local people will loose their job, which will increase the unemployment rate, but the economy is rising, so is inflation. That means the people are losing money by inflation, but not earing anything. Therefore the people will be very unhappy and are unpleased with the foreigners. My Second point is that there is always a kind of the fight, who has a bigger GDP. 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