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
2. Output Method
3. Expenditure Method

One benefit of using three methods instead of one is accuracy; employing multiple methods provides a more reliable estimate as estimates can be cross-verified.

The symbols in the formula represent the following:

• C: Consumption
• I: Investment
• G: Government Expenditure
• X: Exports
• M: Imports

To calculate the National Income (Y), we apply the formula:

$Y = C + I + G + X - M$

Substituting the values:

$Y = €1,500m + €600m + €700m + €150m - €250m$

Calculating step-by-step:

1. $€1,500m + €600m = €2,100m$
2. $€2,100m + €700m = €2,800m$
3. $€2,800m + €150m = €2,950m$
4. $€2,950m - €250m = €2,700m$

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

GNP stands for Gross National Product.

The decrease in GNP per person can lead to several economic effects:

1. Lower Standard of Living: Individuals may afford fewer goods and services, resulting in a reduced standard of living.
2. Reduced Savings: With lower disposable income, citizens will struggle to save, impacting future financial stability.
3. Increased Unemployment: Businesses may reduce hiring or lay off workers due to decreased demand, leading to higher unemployment rates.

To stimulate economic activity, the government could:

1. Increase Government Spending: Boosting expenditure can create jobs and improve public services, fostering economic growth.
2. Provide Subsidies to Encourage Employment: Offering financial support to businesses can incentivize hiring and help drive economic recovery.