Question

Explain  the  need  for the  study  of  National  Income.

TNSCERT Class 10 Economics Ch 1 National Income

Answer 1

The Measurement of national income is vital for various purposes:

1. Accurate size of the economy and country’s level of economic performance;

2. it helps to trace the economic growth trend or speed in relation with previous year(s) and other countries;

3. It helps to understand the composition and structure of national income in terms of various sectors and the periodical variations.

4. To make future projections about development trend of the economy.

5. It helps the government in formulating suitable development plans and policies for increasing growth rates.

6. It can also help in fixing various development targets of different sectors of the economy on the basis of earlier performance.