National Income Statistics and Macroeconomic Concepts

A comprehensive vocabulary review of macroeconomic goals, national income statistics (GDP, GNI, CPI), standard of living (material vs non-material), and limitations of national output measures.

Macroeconomics

The study of the economy as a whole and how households, firms, governments, and foreign markets collectively affect aggregate output, general price levels, and unemployment rates.

Microeconomics

The study of how individual households and firms make decisions in market(s) and how they interact with one another in markets to determine equilibrium prices and quantities.

Recession

An economic contraction defined by two straight quarters of declining growth.

Standard of Living (SOL)

A measure of the extent of material / quantitative and non-material / qualitative necessities and luxuries which individuals and households can enjoy.

Material SOL

The quantitative aspect of well-being that reflects the quantity and quality of goods and services available for consumption, which generally has a positive relationship with national output and disposable income.

Non-material SOL

The qualitative aspects of well-being, including social-emotional well-being (leisure, stress), environmental quality, physical health standards, and educational opportunities.

Actual Growth

The rate of growth in actual output, reflected graphically by a movement from a point within the Production Possibility Curve (PPC) to a point on the PPC.

Potential Growth

The rate of growth of a country’s productive capacity, reflected graphically by an outward shift of the entire Production Possibility Curve (PPC).

National Income

The income or output generated by residents of a country within a specific period (normally a year) for the provision of factors of production or the total value of all final goods and services.

Gross Domestic Product (GDP)

The total money value of all final goods and services produced within a country's geographical boundary, regardless of the ownership of factors of production, during a given period of time and before adjustment for depreciation.

Gross National Income (GNI)

The total money value of all final goods and services produced by productive factors owned by the residents of the country, irrespective of whether they are located within the country or abroad, during a given period of time and before adjustment for depreciation.

Net Income from Abroad

Factor incomes earned by residents overseas minus factor incomes earned by non-residents in the domestic economy, used to convert GDP into GNI via the formula $\text{GNI} = \text{GDP} + \text{net income from abroad}$.

Nominal National Income

The current dollar value of national production, unadjusted for changes in price levels or inflation.

Real National Income

National income that has been adjusted for inflation to measure the actual physical volume of production.

Real GDP per Capita

The total real GDP divided by the population size, used to calculate an average physical output per head.

Inflation

A sustained increase in the general price level (GPL) of an economy, usually measured by the annual percentage rate of change in the Consumer Price Index (CPI).

Consumer Price Index (CPI)

An economic index that tracks the prices of a fixed basket of goods and services commonly purchased by resident households, excluding non-consumption expenditures such as houses, shares, and income taxes.

MAS Core Inflation Rate

A measure of inflation reported by the Monetary Authority of Singapore that excludes accommodation and private road transport costs to capture persistent, demand-driven price changes.

Non-marketed Output

Goods and services that are produced and consumed without market transactions, such as DIY work or homegrown produce, which are omitted from official national income figures.

Underground Market Output

Unrecorded transactions where goods are traded and income is generated (either legal or illegal) without being documented in national income statistics.