Question

In what ways are national income statistics useful?

Short answer

National income statistics help in measuring the economic performance of a nation, and therefore, is a useful statistic.

Step-by-step solution

Meaning of national income statistics

The national income statistics measure the aggregate output production in the country.Gross Domestic Product (GDP) is one of the ways of measuring national income where the dollar value of the output produced within the domestic territory is calculated during a period of time.

The national income of the US is calculated by an agency of the US Commerce Department, called the Bureau of Economic Analysis (BEA). For example, the GDP of the US was $20.93 trillion in 2020.

Importance of national income statistics

The national income helps the policymakers in the following ways:

• Evaluating the health of the economy by calculating the production levels.

• Estimating the employment generation capacity of the economy.

• Estimating the Long-run growth.

• Understanding how economic policies should be altered to improve the economic state of the country.