The Theory of Distribution also known as Pricing of Factors of Production. The theory deals with the determination of the reward of the four factors of production. It is the analysis of how and in what manner the reward payments of the factors of production are determined.
Below are the advantages and disadvantages of communist economic system. Under comprehensive State planning, goods and services are produced strictly according to need. Anohter befit of communist economy is the elimination of large-scale wastage of resources.
The first feature of the communist economic system is the abolition of the private ownership of means of production. In this system, an individual can own nothing except necessaries of life. No one can run private business.
National Product income has been defined as the value of the net output of goods and services in an economy. The goods and services may be tangible goods like a car, a loaf of bread, etc., or it may take an intangible form such as the service rendered by a doctor, a teacher or a barber.
National income accounts provide a meaningful summary of the working of an economic system in a country. This summary which provides a picture of the current operations and mutual relationship of various sectors of the economic activity in a country is prepared in much the same way as certain financial statements of an individual enterprise are prepared.
There are some conceptual problems or difficulties that crop up when we start measuring the national income of a country, Following are some of the difficulties in measuring national income, Problems of Definition of National Income, Calculation of Depreciation, Value of Inventories, The Treatment of Government, Income from Foreign Firms
The first and foremost importance of national income estimate is that it gives us a correct picture of the structure of the economy, as well as a correct picture of the distribution of income according to regions industrial origin, functional services and persons: