Uses of National Income

We discussed the different methods used to calculate national income . In this sections , the uses of measuring national income will be discussed . ALl countries need to maintain the account  of their income and expenditure annually . THis is referred to as national income accounting .
National Income Accounting is  very important both to individuals and to the governemnt . It helps to identify sources of income and heads of expenditure . The study of national income accounting has become very important in recent years for the following reasons :

1. Standard of living comparison

National Income data helps us compare the standard of living of people in different country .
2. Economic performance over time .
3. National Planning
4. Sectoral contributions
5. Economic policy
6. Inflationary and deflationary gaps
7. National expenditure
8. Public sector
9. Distribution of income