Balbharati solutions for Economics HSC 12th Standard Maharashtra State Board
Chapter 7. National Income
2. Explain the importance of national income.
Answer: -
The following points explain the importance of the National Income:
For the Economy: National income data are important for the economy of a country. In present times, the national income data are regarded as accounts of the economy, which are known as ‘Social Accounts’. It tells us how the aggregates of a nation's income, output, and product result from the income of different individuals, products of industries, and transactions of international trade.
National policies: National income data forms the basis of national policies such as employment policy, industrial policy, agricultural policy, etc. National Income also helps to generate economic models like growth models, investment models, etc. Thus, proper measures can be adopted to bring the economy to the right path.
Economic planning: For economic planning, data pertaining to national income is very essential. This includes data related to a country's gross income, output, savings, investment, and consumption which can be obtained from different sources.
Economic Research: National income data are also used by the research scholars of economics. They make use of various data of the country's input, output, income, savings, consumption, investment employment, etc., which are obtained from social accounts.
Comparison of Standard of Living: National income data helps us to compare the standards of living of people in different countries and of people living in the same country at different times.
Distribution of Income: National income statistics enable us to know about the distribution of income in the country from the data related to wages, rent, interest, and profits. We understand the disparities in the incomes of different sections of society.
