What is GNI? What are the benefits and weaknesses of using GNI as an economic indicator?

What is GNI? What are the benefits and weaknesses of using GNI as an economic indicator?

 

Answer:

GNI stands for Gross National Income.GNI is a income recieved by a country both domestically and from foreign.It is a sum of value added by all producers who are resident in a country plus Net taxes not included in output plus income recieved from abroad.

GNI= GDP+Net income recieved from abroad.

Benefits of using GNI:- The income groupings use the GNI while determining the operational lending policy,because world bank also follow the same method.

It measures the countries performance at the macro level.

Limitations-

It does not take into account the factors which are responsible for the welfare of an economy.

For example- quality of life,life expectancy,education level,mortality rate etc.

It doesnot measure the performance of a country at a household level.

Asked on February 15, 2018 in economics.
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