Why should a country measure her… | Economics

Question 1 Report

Why should a country measure her national income?

Answer

Answer Details

A country measures its national income for the following reasons:

To assess economic performance: national income shows the total output of the economy and whether it is growing or declining.
To compare standards of living: per-capita income allows comparison of welfare over time and between countries.
To aid economic planning: reliable income figures guide the government in preparing budgets and development plans.
To measure the contribution of sectors: it shows how much agriculture, industry and services each add to output.
To study income distribution: it reveals how income is shared among the people and regions.
To guide policy: it helps government decide on taxation, spending and other measures.
For international purposes: it is used to assess a country's ability to contribute to, or receive aid from, international bodies.

Why should a country measure her national income?