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Chapter 32: Q. 12. (page 782)

What is the primary way in which economists measure standards of living?

Short Answer

Expert verified

GDP per capita is one of the most important tool which is used by economists to measure the standard of living.

Step by step solution

01

Step 1. Meaning of standard of living.

The term 'standard of living' in economics refers to the quality of material goods and services available to a given population. This term basically focuses on basic material factors such as income, GDP, life expectancy and economic opportunity.

02

Primary ways to measure standard of living.

GDP per capita - This is a nations gross domestic product divided by its population.

Real GDP per capita- It removes the effect of inflation or price increases. Real GDP is a better measure of the standard of living than normal GDP.

03

Examples of standard of living.

United nation's Human development index, which scores 189 countries based on factors including life expectancy at birth, education, and income per capita.

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Most popular questions from this chapter

Using the research skills you have acquired, retrieve the following data from The World Bank database (http://databank.worldbank.org/data/ home.aspx) for India, Spain, and South Africa for 2010–2015, if available:

• Telephone lines

• Mobile cellular subscriptions

• Secure Internet servers (per one million people)

• Electricity production (kWh)

Prepare a chart that compares these three countries. Describe the key differences between the countries.

Retrieve the following data from The World Bank database (http://databank.worldbank.org/data/ home.aspx) for India, Spain, and South Africa for the most recent year available:

• GDP in constant international dollars or PPP

• Population

• GDP per person in constant international dollars

• Mortality rate, infant (per 1,000 live births)

• Health expenditure per capita (current U.S. dollars)

• Life expectancy at birth, total (years)

What are the major issues with regard to trade imbalances for the U.S. economy?

What are the major issues with regard to trade imbalances for low- and middle-income countries?

Use the AD/AS model to show how increases in government spending can lead to more inflation.
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