USES OF NATIONAL INCOME FIGURES
- We need national income statistics to measure the size of the "National cake' of goods and services available for competing uses of private consumers, government, capital formation and exports (less imports).
- National Income statistics are also used in comparing the standard of living of a country over time
- And also the standards of living between countries.
- National Income Statistics provide information on the stability of performance of the economy over time e.g. a steadily increasing income would be indicative of increasing national income.
- If National Income Statistics are disaggregated it would enable us to assess the relative importance of the various sectors in the economy. This is done by considering the contribution of the various sectors to Gross National Product over time. Such information is crucial for planning purposes for it reveals to planners where constraints to economic development lie. It therefore becomes possible to design a development strategy that eventually would overcome these problems. This central contribution could be in the form of employment or the production of goods and services.
- By assessing exports and imports as a percentage of Gross national Product i.e. using national statistics, it is possible to determine the extent to which a country depends on external trade.
- National Income Statistics also help in estimating the saving potential and hence investment potential of a country.