National Income Accounting
Britannica Concise Encyclopedia:
Top
national income accounting
Set of principles and methods used to measure a country's income and production. There are two ways of measuring national economic activity: the expenditure approach, which measures the money value of the total output of goods and services in a given period (usually a year); and the income approach, which measures the total income derived from economic activity after allowing for capital consumption. The most commonly used indicator of national output is the gross domestic product (GDP). National income may be derived from gross national product (GNP) by making allowances for certain non-income costs included in the GNP, such as indirect taxes, subsidies, and depreciation. National income thus calculated represents the aggregate income of the owners of the factors of production; it is the sum of wages, salaries, profits, interest, dividends, rent, and so on. The data accumulated for calculating the GDP and national income may be manipulated in various ways to show various relationships in the economy. Common uses of the data include breakdowns of GDP according to type of product, breakdowns of national income by type of income, and analyses of the sources of financing (e.g., personal savings, company funds, or national deficits).
For more information on national income accounting, visit Britannica.com.
Barron's Accounting Dictionary:
Top
National Income Accounting
Necessary step in learning how macroeconomic variables-such as the economy's total output, the price level, the level of employment, interest rates, and other variables are determined. The national income accounts provide regular estimates of gross domestic product (gdp) , the basic measure of the performance of the economy in producing goods and services. They are also useful because they provide a conceptual framework for describing the relationships among three key macroeconomic variables: output, income, and spending.
Investopedia Financial Dictionary:
Top
National Income Accounting
A term used in economics to refer to the bookkeeping system that a national government uses to measure the level of the country's economic activity in a given time period. National income accounting records the level of activity in accounts such as total revenues earned by domestic corporations, wages paid to foreign and domestic workers, and the amount spent on sales and income taxes by corporations and individuals residing in the country.
Investopedia Says:
National income accounting provides economists and statisticians with detailed information that can be used to track the health of an economy and to forecast future growth and development. Although national income accounting is not an exact science, it provides useful insight into how well an economy is functioning, and where monies are being generated and spent.
Some of the metrics calculated by using national income accounting include gross domestic product (GDP), gross national product (GNP) and gross national income (GNI).
Related Links:
Learn the underlying theories behind these concepts and what they can mean for your portfolio. The Importance Of Inflation And GDP
From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone. Explaining The World Through Macroeconomic Analysis
Post a question - any question - to the WikiAnswers community:
Copyrights:
Britannica Concise Encyclopedia
Britannica Concise Encyclopedia. © 1994-2012 Encyclopædia Britannica, Inc. All rights reserved. Read more
Barron's Accounting Dictionary
Dictionary of Accounting Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
Read more
