National income is the total of all income earned in a country during a specific period, usually a year. This figure shows whether an economy is growing or declining. Economists use national income figures to compare the economies of various countries.
Determining national income. Economists calculate national income in either of two ways. One way is based on what individuals and businesses earn. The other is based on the production of goods and services. Each method provides the same national income figure because the amount that people earn equals the value of the goods and services produced.
Determining national income. Economists calculate national income in either of two ways. One way is based on what individuals and businesses earn. The other is based on the production of goods and services. Each method provides the same national income figure because the amount that people earn equals the value of the goods and services produced.