National income is calculated mainly to

Step 1: Analyze the question The question asks about the main purpose of calculating national income, which is the total value of goods and services produced in an economy over a period, usually a year.

Step 2: Explain the concept National income accounting is done to:

• Measure the overall performance and size of the economy
• Show the contribution of each sector (agriculture, manufacturing, services, oil and gas, etc.)
• Compare the economy's growth over time and with other countries
• Help the government plan and make policy decisions
• Estimate living standards through per capita income

Step 3: Evaluate each option

• A. Determine how income is to be shared. Income distribution is a separate concern, handled by fiscal and wage policies. National income figures do not decide how income is shared.
• B. Help firms generate more funds. Firms raise funds through sales, loans, and shares, not through national income calculation.
• C. Determine aid to be received from other nations. Aid depends on donor policies and needs. It is not the main reason for national income accounting.
• D. Determine the level of sectoral performance. National income is broken down by sector (for example agriculture, industry, and services) using the output, income, and expenditure approaches. This shows how each sector contributes to the economy. This is the best fit.

Step 4: Answer

Tip: Whenever you see "why is national income calculated?", think measurement and planning: economic performance, sector contributions, growth, living standards, and policy planning. Options about sharing income, firms' funds, or aid are distractors.