What is National income accounting?

-Macroeconomics is ultimately concerned with the termination of the economy’s total output, the price level, level of employment, inflation etc.

-The national income accounts give us regular estimates of GNP, the basic measure of the performance of the economy in producing goods & services.

-The national income accounts are useful because they provide us with a conceptud framework for describing the relationship among three key macro – economic variables namely output, income and spending.

-From the circular flow of income, we can see that GNP is equal to total income earned in the economy and is also equal to total spending.