NCERT Solutions for Class 12 Economics Chapter 2 National Income Accounting

National income accounting is a government bookkeeping system that measures a country's economic activity—offering insight into how an economy is performing. Such a system will include total revenues by domestic corporations, wages paid, and sales and income tax data for companies. According to D.C. Colander, "National income accounting is a set of rules and definitions for measuring economic activity in the aggregate economy." It tries to summarise the performance of an economy by measuring national income aggregates in a year. It provides the standards by which the economic activity of a country could be assessed. It is based on this appraisal that a government forms its policies and programmes to maximise the material welfare of the people. And this is the basic purpose of national income accounting. Structure of the macro economy is given by the circular flow of income and output. National income accounting has its foundation in the circular flow model.