What follows is a list of uses of National Income statistics, some of the methods of measuring it and a definition of what national income statistics are.
What are National Income Statistics?
National Income Statistics is data generated from the value of goods and services produced by a country’s economy.
3 Methods of Measuring National Income
The three methods of measuring Nation income are;
- Value added (Product Method)
This methods involves calculating the contribution of each business in the domestic territory of a country. This therefore means that you must first have to identify and classify the business before you start measuring them.
This involves revenue generated from the primary factors of production. For example labor earns salary, entrepreneur gets profit, land gets rent and capital get interests.
This is the alternative way of measuring nation income. It involves expenditures on government purchases, individual consumption and private firms investment.
List of Uses of National Income Statistics
Below is a list of National Income statistics;
- Provides information on the country’s economic performance over a period of time.
- Provides information to be used for making economic policies or budgeting or planning.
- Provides information on the contribution of each sector of the economy to the national income.
- Provides a breakdown on consumer expenditure and government expenditure.
- Provides information on the distribution of income.
- Provide information on the types of factor incomes in the economy.
- Provide statistics for measuring the economic growth of the country.
- Provides information that is used to measure the standard of living in the country.
- Provide information used for comparing economic performance of the country across two or more years.
To Learn more about National Income read this resourceful Economic Journal titled : Definition Of National Income
Do not miss all our latest updates on benefits of National Income Statistics to government and how to calculate it using technology