Asked by Ashley Mayer on May 17, 2024
Verified
Which of these is the best measure of the average standard of living in an economy?
A) The unemployment rate
B) Nominal income
C) Real GDP
D) National debt
E) Real GDP per capita
Real GDP Per Capita
Real GDP divided by the population; the best measure of an economy’s standard of living.
Standard Of Living
The degree of wealth and material comfort available to a person or community, measured through income, employment, class disparity, poverty rate, and housing affordability.
Real GDP
The total value of all goods and services produced within a country, adjusted for inflation, reflecting the real quantity of goods and services.
- Acquire insight into the components and relevance of GDP and GDP per capita as measures of economic prosperity.
Verified Answer
AT
Andrew TallehMay 19, 2024
Final Answer :
E
Explanation :
Real GDP per capita is the best measure of the average standard of living in an economy as it takes into account the size of the population, adjusts for inflation, and provides a measure of the total output per person in the economy. The other options (unemployment rate, nominal income, national debt) are not necessarily indicative of the overall standard of living in an economy. Real GDP alone may overstate the standard of living if the population is growing rapidly, and nominal income does not account for inflation.
Learning Objectives
- Acquire insight into the components and relevance of GDP and GDP per capita as measures of economic prosperity.