Chapter
Economics Tuition on National Income Accounting and Economic Indicators

In this section, you will examine the Macroeconomic topic of National Income Accounting and Economic Indicators, which is an important chapter that relates to the assessment of living standard for developed and developing economies. In particular, the measurement will involve the use of various economic indicators, both quantitative and qualitative, to determine whether a country’s living standard has improved or declined. In addition, our economics tuition programme will provide an elaborate coverage and discussion of this topic to prepare students for exam-based application by honing their thinking and writing skills extensively.

Economics Tuition on NIA and Economic Indicators: Content of Teaching

Given the complexity of the economic concepts and examples described in this Macroeconomic topic, our economics tuition will provide an organized coverage of the teaching content to facilitate your conceptual understanding, such that you can apply the economics knowledge to JC Economics Essays and CSQs. The following content of teaching will be an effective way for you to understand the key issues and economic concepts, like standard of living.

I. Meaning of Standard of Living (SOL)
II. Measuring the material aspect of SOL
III. Measuring the non-material aspect of SOL
IV. Why should countries use qualitative economic indicators to measure SOL?

Learn National Income Accounting with our Economics Tuition

Now that you have examined the different facets of the topic, you should undergo in-depth revision by attempting various essay and case study questions to reinforce your conceptual understanding of standard of living and the related indicators. In our economics tuition programme, you will learn how to apply these abstract-sounding concepts to your answers and frame the arguments in organized ways, such that you can maximise the mark attainment for each question.

JC Economics Essays for Discussion and Practices

Given that you have a basic understanding of standard of living, as an economic concept, you can now apply this newfound knowledge to an essay practice question to assess your level of comprehension. During our economics tuition, you will learn how to organise your thoughts and arrange the answers to present the points clearly and effectively.

Essay Question 1
The ultimate goal of all governments is to improve the general standard of living (SOL) of its population.

(a) Explain how a government can improve the current and future standard of living of its population. [12]
(b) Discuss the extent to which a government can assess that its goal to improve the general standard of living of its population has been achieved. [13]

Essay Question 2
What are the problems of time comparison as factors that undermine the effectiveness of using real GDP per capita as an economic indicator to measure standard of living? [25]

Economics Tuition Videos on National Income Accounting

These online learning economics videos on National Income Accounting and Economic Indicators will aid in your study of the Macroeconomics chapter as you prepare for your examinations. As part of the economics tuition programme, the demonstrative writing, accompanied with the audio-visual elaborations and illustrations, will serve as effective learning tools to reinforce your learning of Economics, thereby allowing you to excel at the examinations.

National Income Accounting & Economic Indicators
The ultimate goal of all governments is to improve the general standard of living (SOL) of its population.

(a) Explain how a government can improve the current and future standard of living of its population. [12]

National Income Accounting & Economic Indicators
The ultimate goal of all governments is to improve the general standard of living (SOL) of its population.

(b) Discuss the extent to which a government can assess that its goal to improve the general standard of living of its population has been achieved. [13]

Article (1): What is standard of living?

By JC Economics Tutor Simon Ng, Economics Focus

A country’s Standard Of Living (SOL) is a key indicator of a country’s success and it determines whether it is a developed or developing country. Standard Of living encompasses both the quantitative, tangible, and the qualitative, intangible, aspects.

So you may be wondering what exactly is a country’s SOL and what does it entail. The formal definition of SOL is it ‘Measures the average quality of the life of a population which includes both the material and non-material aspects of life’.

To better understand SOL, we shall break it down into its two parts, the quantitative and the qualitative components.

The quantitative SOL is measured in terms of the purchasing power that the population processes which will then reflect the level of material comforts attainable by them and this is most commonly represented by the real income per capita. It is the only economic indicator that directly determines the quantitative value of SOL.

The qualitative SOL is measured in terms of the quality of life led by the population, which will reflect the intangible aspects, the comfort of life that the people have and this is commonly represented by the mortality rate, birth rate, level of working hours, stress and the level of externalities in the country consumption and production. The use of qualitative economic indicators like Human Development Index and Measurement of Economic Welfare will give a more complete picture of SOL.

However, when we measure the standard of living using the quantitative and qualitative economic indicators, we must take note of the limitations of the real per capita income and qualitative indicators like Human Development Index and Measurement of Economic Welfare.

The limitations of real GDP per capita in measuring SOL will be due to the problems of time and space comparison while the limitations of qualitative indicators can be seen from the difficulties in setting yardstick for qualitative indicators.

Article (2): The Economics of Well-Being

By Justin Fox, Harvard Business Review

In this article, the author has brought up the use of Gross Domestic Product (GDP) as an economic indicator to measure the standard of living of a country. Ever since WWII, GDP has been the key means of measurement of a country’s economic performance.

However, at the present day, economists and political leaders have shifted their attention away from GDP. Instead, alternative indicators are being considered to provide a more accurate depiction of a country’s living standard. Apart from the typical Human Development Index (HDI), which was set by the United Nations, Bhutan’s emphasis on the abstract-sounding Gross National Happiness (GNH) has caused a paradigm shift in how countries should measure living standards.

In short, we cannot rely on GDP as the sole indicator to measure standard of living of a country. The non-material aspects of life, like the emotional aspects of happiness and sense of security, are to be factored into the assessment of a country’s living standards.

Article (3): What is standard of living like in Singapore?

Article (4): Is real income per capita a good indicator for standard of living?

Article (5): Why must we use qualitative economic indicators to measure standard of living?

Article (6): What are the non-material aspects of standard of living?

Article (7): Are qualitative aspects of standard of living accurate in measuring standard of living?


Question: Based on the featured articles, explain how governments can measure the material and non-material aspects of standard of living in a country.