Table of contents
of the study
of the study
Analysis of Data
income is the sum of the money value of all the commodities and services
produced in a country within a particular period of time usually one year.
The question of how an economy grows
could come to mind at this juncture. It
the amount of goods and services produced by an economy increases. If it does not increase yearly, it is not
growing, even if it is growing, the rate of growth may not be uniform among
years. Therefore it may not be possible
to determine the condition of the economy.
In any case, an economy needs an
indicator for measuring economy growth, this indicator is the monetary
summation at all the commodities and service produced in an economy within a
particular period of time usually a year.
To get national income of a country
for instance, we take the list of the goods and services produced in the
country during the year, assign values to them and add up. If we can do this year after year, we shall
be able to make comparison of activities of Nigeria year after year. Then we can decisively determine whether the
economy of Nigeria
is growing, declining or stagnant. It is
growing if the National income increases year after year, declining, if the
National income is decreasing and stagnant it there is no difference in the
National Income for years.
In measuring National Income, an
indicator called Gross Domestic Product (GDP) is used at current price. It is therefore quite important here to point
out the role that prices could play in the measurement of National Income. Prices of goods and services changes from
time to time. These changes can affect
any attempted estimates.
Considerably. Therefore to get an
idea of the real physical change in National Income from year to year, effect
of price changes must be removed.
National Income should be measured in
real terms and allow for changes in price levels. For instance whenever the economy experiences
inflation, price rises while the quantities of goods and services may remain
constant. Let us say that 2000, the
total units of the go0ods and services realized in Nigeria amounted to 50,000 units
and also 50,000 units in 2001. Let us
further assume that the average per unit in 2000 was N10.00 while the price in
2001 was N15,000.
Nigeria’s income with GDP as an
indicator for 2000 was 50,000 units X N10.00 = N5000,000 Nigeria’s
income with GDP as an indicator for 2001 was 50,000 units X N15.00 = N750,000.
If the two figures were presented to a
layman as final products of overall estimates for 2000 and 2001, he would be
tempted to say that the National income for 2001 was higher than that of
2000. This is so monetarily but really
the income for both year are equal. The
difference in value was due to rise in p rice in 2001 while the quantities of
goods and services were the same in both years.
The same thing can be applicable when
a country experience deflation or depression.
Therefore in measuring national income for different years using gross
domestic product as an indicator effects of price changes must be given the
normal due. In so doing the changes in
economy can be determined appropriately.
PROBLEM / MOTIVATION
As a result
of poor economic condition in Nigeria
relevant information is of great interest to me for investigation if viable
economic solution can be revealed.
Nigeria considered as one of the
third world countries is been assessed by their income yearly. It is a simple logic of our living that it
country’s income is high with considerable population, the enjoyment of the
citizens of that country would be high, while the enjoyment is low with low
national income. It is on this point
that I find it very expedient to analyze the national income of Nigeria and
make necessary recommendation for the improvement of the economy for the
betterment of the citizenry.
AIMS AND OBJECTIVES
In view of Nigeria’s
economic predicament, the project is aimed at investigating the relationship
existing between disposable income, savings and government final expenditure
for the purpose of suggesting solutions to our economic problems.
After the regression analysis had been
carried out, it will supply solution to the following questions:
Is any linear relationship between the variables
How reliable is our regression coefficient?
Can we predict the future value of dependent variable?
How reliable will be our estimate?
SCOPE OF THE STUDY
The study is centre on “National
Income, Savings and Government Final Consumption Expenditure Covering the
period of six years 1998 – 2003.
The raw data used are collected as primary
data by federal office of statistics” publication and Federal Ministry of
Finance Publication. The data are
collected as primary data by federal office of statistics and used as secondary
data in this project which centered on national Accounts. Some of these National Accounts Aggregates
Include Gross Domestic Product (GDP) final consumption expenditure, exports and
National Accounts data presents the
record of economic transaction of the economic in a systematic manner and show
the relationship between the various components of the economy. Economic transaction cover all the activities
of an entity (Household, government, firm, financial institution) that are of
economic nature (production, consumption distribution, savings and foreign exchange
transactions. These economic transactions
of all the entiti8tes and combined together ad presented inform of account.
Data collected for analysis in this
study center on:-
Appropriation of disposable income as dependent
Savings as one of the independent variable
Government final consumption expenditure as another
SIGNIFICANCE OF THE STUDY
will help to know the status of Nigeria
economy. The knowledge of the status
will help to make necessary recommendation in order to revitalize the poor
economic condition of the country for the better future.
The study will also create avenue for
DEFINITION OF CONCEPTS
Gross Domestic Product (GDP): This
is the sum of the money value of all locally produced goods and services. It does not include international
transaction. GDP does not make allowance
for depreciation of capital.
Gross National Product (GNP): This is the total money value of current
market prices of all final goods and services produced by the nationals during
a specific period. It includes net
income from abroad in respect of the country’s nationals without any
consideration for depreciation of capital.
National Domestic Product
(NDP): This is the
total value of all goods and services produced in a country in a period of
time. It exclude the value of the net
earnings and incomes from abroad. An
allowance being made for depreciation of capital.
Net National Product (NNP): This is the monetary value of all goods and
services produced within the country during a specific period. It includes net incomes and earning from
abroad and provision being made for the replacement of depreciation of capital.
Disposable Income (DPI): This is the amount of money per year that private
sector are free to spend when depreciation of capital, all taxes, all net
profits made by firms but not paid out as divided are added to the disposable
and transfer payment subtracted. We
arrive at gross national product.
Net Economic Welfare (NEW): This examines those factors not considered when
calculating the Gross National Product (GNP).
Such factors include social cost 9pollution) and leisure time the net
economic welfare tend to remove the product (GNP). A nation might have a very high GNP at a very
great social cost as pollution, rising crime etc.
Per Capita Income (PCI) This is the gross domestic product divided by the
population of the country. Per capita
income can be calculated once the population and gross domestic product are
known. So that P.C.I = GDP
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