Explore BrainMass
Share

The Importance of National Income Accounting

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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 25, 2018, 8:35 am ad1c9bdddf
https://brainmass.com/economics/finance/the-importance-of-national-income-accounting-545649

Solution Preview

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 Summary

Solution helps in explaining the importance of national income accounting

$2.19
See Also This Related BrainMass Solution

Value-added statements, financial statements, risk assessment

What benefits are gained from value-added statements? Should firms just rely on financial statements? Why or why not? What role does risk assessment play with respect to corporate financial management?

View Full Posting Details