Can you please help me explain the importance of national income accounting, including how GDP is measured and why in 2 -3 pages?© BrainMass Inc. brainmass.com October 15, 2018, 10:27 pm ad1c9bdddf - https://brainmass.com/economics/finance/the-importance-of-national-income-accounting-545649
National income accounting
Can you please help me explain the importance of national income accounting, including how GDP is measured and why in 2 -3 pages?
As per Britannica, "National income accounting is a set of principles and methods used to measure the income and production of a country. There are basically two ways of measuring national economic activity: as the money value of the total production of goods and services during a given period (usually a year) or as the total of incomes derived from economic activity after allowance has been made for capital consumption." National income accounting helps in estimating the income added by the economy.
Importance of National income accounting:
1) It helps in policy making and planning.
2) It helps in understanding and evaluating the performance of the economy.
3) It helps in measuring inflation and deflation changes.
4) It helps in comparing the standard of living
As per investorwords.com, GDP is the "total market value of all final goods and services produced in a country in a given year, ...
Solution helps in explaining the importance of national income accounting