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8 May, 2015 - 11:03

National income accounting is used to determine the level of economic activity of a country. Two methods are used and the results reconciled: the expenditure approach sums what has been purchased during the year and the income approach sums what has been earned during the year.

Just as firms need to know how well they are doing, so does a country. National income accounting provides the statistics to determine if the economy is encountering difficulties.