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(a) Why is it important to estimate National Income of a country? What difficulties do economists encounter while carrying out such a task particularly in developing countries? (10 marks)

(b) The table below represents economic transactions for country XYZ in billions of shillings:

Total Output Intermediate purchases
Agriculture 30 10
Manufacturing 70 45
Services 55 25

(i) Calculate the Gross Domestic Product of this economy using the value
added approach. (3 marks)

(ii) If depreciation and indirect taxes equal 8 billion and 7 billion shillings respectively, determine the Net Domestic Product both at market prices and at factor costs. (7 marks)
(Total: 20 marks)