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The National Income Account of any country is used as a system of book keeping whereby the government records the extent to which the country grows in economic terms within a specified time frame. The National Income account is used as a reflection of the standard of living of the people of the country and to depict how developed and economically advanced the country really is but it can be questioned to be the authentic measure to analyze the level of the standard of living of the people. This is due to various limitations of the account.
The first limitation that can be drawn is the fact that although the National Income Account measures the level of Gross Domestic Product (GDP) in a country, it does not account for the differences and the distribution of the income. It gives us an overall picture of the average earnings of the member citizen of the country but realistically speaking, there are various class divisions in any country and not everyone earns the same amount of money. There are also certain sources of income and some inflows of money that are not accounted for in the national income account such as the black markets which are not considered a legal form of business. This money is however not reflected in the official accounts which mean that this kind of income is not recorded and so we cannot be sure of the exact living standards of the people who earn money from these sources. There are other sources of income too that are not recorded as the official earnings such as the young students who might earn money by babysitting, free lancing or doing extra chores for people which pays them but this is not considered...
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