Limitations of the national income accounting system include
A)valuing all output at its market price regardless of whether it contributes to a society's economic welfare
B)placing a market value on all positive externalities but ignoring negative externalities
C)accurate measurement of the value of leisure time
D)double counting food produced on a farm for family consumption
E)ignoring government production of goods and services

Question

Quizplus · Accepted Answer

National income accounting system values all output at market price, even if it does not contribute to economic welfare, which is a limitation of this system. For example, the production of weapons and war equipment is included in GDP, but it does not contribute to the economic welfare of the society.

Limitations of the National Income Accounting System Include