Macroeconomics Worksheet: National Income Accounting
2.1
DEFINITION OF NATIONAL INCOME
National Income National income refers as the flow of goods and services that can be obtained by a nation for a certain period, usually in a year.
National Income Accounting National income accounting can be refer as the government bookkeeping system that measures the health of an economy, projected growth, economic activity, and development during a certain period of time. It helps in assessing the performance
The double entry system principle of
of an economy and the flow of
accounting is used to prepare the
money in an economy.
national income accounts.
National Income Accounting Equation The national income equation represents the relationship between national income
and the economy’s expense, along with other attributes, as shown in
the following equation: Where:
Y = C + I + G + (X - M)
Y C I G X M
: : : : : :
National income Consumption Investment Government expenditure Exports Imports
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