National Income Accounting

For more information on national income accounting, visit Britannica.com.

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).

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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.