Question

Give reasons or explain the following statement:

The concept of national income has an important place in economic development. 

Answer 1

The concept of national income has an important place in economic development. National income is the total market value (in monetary terms) of all final goods and services produced by the firms during an accounting year. In other words, it can be defined as the aggregate of all factor incomes flowing from the firms to the households. Thus, this concept of national income is important in economic development as higher the national income, higher is the economic development of a country.