CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
National income is the total of the money value of all the commodities and services produced in a country within a particular period of time usually one year.
The question of national income and expenditure could come to mind at this juncture. When economy grows the amount of goods and services produced by
an economy increases. If it does not increase yearly, it is not growing, even if it is growing, the rate of growth may not be uniform among years. Therefore it
may not be possible to determine the condition of the economy. In any case, an economy needs an indicator for measuring economy growth, this indicator is
the monetary summation at all the commodities and service produced in an economy within a particular period of time usually a year. To get national
income of a country like Ghana for instance, we take the list of the goods and services produced in the country during the year, assign values to them and add up. If we can do this year areyear, we shall be able to make comparison of activities of Nigeria year are
year. Then we can decisively determine whether the economy of Nigeria is growing, declining or stagnant. It is growing if the National income increases year are year, declining, if the National income is decreasing and stagnant it there is no difference
in the National Income for years. In measuring National Income, an indicator called Gross Domestic Product (GDP) is used at current price. It is therefore quite important here to point out the role that prices could play in the measurement of National Income. Prices
of goods and services changes from time to time and these changes can aect any attempted estimates.
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