Multiple choice

Which factor among the following creates obstacle in measuring correct estimate of national income?

  1. Existence of non-monetised sector

  2. Low rate of savings

  3. Under employment

  4. Inflation
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A Correct answer
Explanation

The non-monetized sector (subsistence farming, barter, self-consumption) exists largely outside recorded monetary transactions, making accurate measurement difficult. This portion of economic activity is uncounted in official GDP figures. Savings rate, unemployment, and inflation don't create measurement obstacles - they're economic phenomena that are measured.

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