THE NATIONAL

INCOME ACCOUNTING

Name: Ocampo, Abegail O. Professor: Dr. Remigio G. Tiambeng

Subject & Time: EcoDev MW 9:30-11:00 Date: January 27, 2020
 Over the previous discussion about the national income accounting, national
income accounting explains the importance of its process in measuring the economic
performance. In this lesson, we are able to tackle the Gross Domestic Product / Gross
National Product, Differentiation of Economic Growth and Economic Development,
National Income and Wealth Capital and the three Approaches in Measuring the Gross
Domestic Product.

National Income Accounting is a bookkeeping system that a national government

uses to measure the level of the country's economic activity in a given time period.
For example, NIC measures the revenues earned in the nation's companies, wages paid,
or tax revenues. Economic Growth is being measured by the GDP, it is quantitative, and
for short-term while Economic Development is being measured by Human Development
Index, it is qualitative and for long-term. Gross Domestic Product (GDP) is a measure of
the total market value of all final goods and services produced within the boundaries of
the Philippines whether by domestic or foreign-owned sources, during a specified period
of time, usually one year. Gross National Product (GNP) is a measure of the total market
value of all final goods and services produced by a Philippine’s residents and businesses
during a specified period of time, usually one year. GDP is the principal measure of the
Philippine national economic health/performance. There are three approaches in
measuring GDP. (1) Expenditure Approach measures the total amount spent on the
goods produced by a country in a year. GDP = C + I + G + (X-M). (2) Income Approach
measures the total incomes earned by households in a nation in a year. GDP = W + R + I
+ BP + IBT + SA + d + F. (3) Production Approach sums up the market value of the total
production of all the major economic sectors of the country. GDP = AS + IS + SS.

Studying this would help us in policy making and planning. It helps in

understanding and evaluating the performance of the economy. It helps in measuring
inflation and deflation changes. And lastly, it will help in comparing the standard of living
and in measuring of thus our country is growing or developing.