Theory question 107
National IncomeSection B (answer four questions only from this section)
Why should a country measure her national income?
Show the model answer
Model answer
To measure the standard of living (income per head).
To compare living standards and growth between countries.
To measure the rate of economic growth over time.
To help government in economic planning and policy making.
To show the contribution of each sector (agriculture, industry, services) to the economy.
To guide the distribution of income and help fiscal policy, e.g. taxation.
To help international bodies decide contributions and aid (e.g. IMF quotas, World Bank loans).
To give information to investors and researchers.
Explanation
Give each use as a separate point with a brief explanation.