national income accounting
National Income
National income is a sum of incomes received in a year by a nation’s factors of production for their contributions to economic activity; or a sum of wages and salaries, interest, rent, and profit received during a year by a nation’s factor of production. It excludes gifts, consumer debt, grants and benefits received without engaging in any productive or economic activity.
National income accounting refers to the set of rules and techniques of measuring the income of the economy. It explains the process by which a country ascertains its total flow of output and inputs. Certain concepts of the national income include the gross domestic product, net factor income from Abroad, gross national product, depreciation etc.
The size of the national income is determined by the factors that affect the level of production in a country. The higher the level of production or output, the higher the national income. Some of these factors are discussed below:
Quantity and quality of the production resources: The level of production in a country is influenced by the availability of land, labour, capital and entrepreneurship. All other things being equal, the greater the quantity and quality of the factors of production, the higher the level of productivity and national income, if the factors of production are scarce or very inefficient, productivity will tend to be low which will result in low national income.
State of technical knowledge: The extent to which available manpower and technical skills is developed affects the level of output and income. A country with high level of technology generally has high degree of productivity and high national income.
Natural factors such as the weather could affect the level of production and national income. This is especially true of a country which is predominantly agriculture. Favourable weather helps to increase the level of production resulting in increase in national income. Adverse weather on the hand
National income is a sum of incomes received in a year by a nation’s factors of production for their contributions to economic activity; or a sum of wages and salaries, interest, rent, and profit received during a year by a nation’s factor of production. It excludes gifts, consumer debt, grants and benefits received without engaging in any productive or economic activity.
National income accounting refers to the set of rules and techniques of measuring the income of the economy. It explains the process by which a country ascertains its total flow of output and inputs. Certain concepts of the national income include the gross domestic product, net factor income from Abroad, gross national product, depreciation etc.
The size of the national income is determined by the factors that affect the level of production in a country. The higher the level of production or output, the higher the national income. Some of these factors are discussed below:
Quantity and quality of the production resources: The level of production in a country is influenced by the availability of land, labour, capital and entrepreneurship. All other things being equal, the greater the quantity and quality of the factors of production, the higher the level of productivity and national income, if the factors of production are scarce or very inefficient, productivity will tend to be low which will result in low national income.
State of technical knowledge: The extent to which available manpower and technical skills is developed affects the level of output and income. A country with high level of technology generally has high degree of productivity and high national income.
Natural factors such as the weather could affect the level of production and national income. This is especially true of a country which is predominantly agriculture. Favourable weather helps to increase the level of production resulting in increase in national income. Adverse weather on the hand