living standards

Question 1

Define Living standards

Answer 1

refer to all the factors that contribute to a person’s well-being and happiness.

Question 2

define Human
Development Index
(HDI):

Answer 2

a measure of living standards which takes into account** income, education
and life expectancy.**

HDI value from 0 (lowest) to 1(highest).

Question 3

define Genuine Progress
Indicator (GPI)

Answer 3

a measure of living standards which takes into account a variety of indicators including income, leisure time, distribution of income and environmental standards.

GPI rises when the poor receive a higher proportion of income and it falls when income
becomes more unevenly distributed.

Question 4

define Real GDP per head/capita and state the fourmula

indicator of living standards

Answer 4

this measures the
average income per person in an economy.

Real GDP per capita = Real GDP / Population

Question 5

Reasons For Low/Varying Economic Development (7)

Answer 5

• Domination on international trade by developed nations
• Lack of capital
• Insufficient investment in education, skills & healthcare
• Low levels of investment in infrastructure
• Lack of efficient production and distribution systems
• High population growth
• Other factors like a corrupt govt. or war

Question 6

advantader (Merits) of using GDP per capita to measure living standards: (4)

as an indicator of living standards

Answer 6

• GDP is a useful measure of the total production taking place in the country, and so indicates the material well-being of the economy
• it also takes population into consideration, adding emphasis on the goods and services available to individuals
• since it is calculated on output, is a good indicator of the jobs being created
• GDP data is readily available so is population data

Question 7

Limitations of using GDP per capita to measure living standards:(6)

as an indicator of living standards

Answer 7

• it takes no account of what people can buy using their incomes.
• GDP doesn’t consider changes in technology that can have a large impact on living standards.
• distribution of income is very unequal in reality
• excludes theunpaid work people do
• doesn’t differentiate between the positive and negative values economies place on different output/expenditure.
• doesn’t consider leisure activities, health and education levels, environmental quality- all that determines people’s happiness and well-being

Question 8

The limitations of HDI to compare living standards (4)

Answer 8

• it combines a set of separate indicators into one
• there are wide divergences in HDI within countries
• GNI per head doesn’t say anything about inequalities in income and wealth within countries
• it doesn’t consider other factors such as environmental quality, access to safe drinking water, political freedom, crime rates etc
• the HDI information for all countries may not be available

Question 8

The benefits of using HDI to measure living standards (4)

Answer 8

• it takes into account some major indicators of living standards
• recognises that it is not just output or income that determines living standards, but also social factors
• it is a useful method to compare global living standards– it shows clear patterns of living standards
• it is useful and reliable

Question 9

define Purchasing power
parity

Comparing living standards between countries

Answer 9

an exchange rate based on the ratio
of the price of a basket of products in different countries.

Question 10

Difference in living Standards within a country(3)

Answer 10

• Local government provisions of education and health
• Regional variances in income and consumption
• Major type of sectors/jobs

Question 11

Difference in living Standards between countries (6)

Answer 11

• Productivity of industries
• Population
• Ability of citizens pay taxes
• Provision of health and educational facilities
• Variety of goods/services produced
• War, crime and natural disasters

Question 12

define Gender Inequality Index (GII)

Answer 12

a measure of gender inequalities in terms of reproductive health, empowerment and labour market participating.

Question 13

Happy Life Expectancy Index (HLEI).

Answer 13

measure the degree to which people live long and happy lives.

found by multiplying
life expectancy at birth by a happiness index

Question 14

define Gross National
Happiness

Answer 14

a measure of living standards which includes a wide number of indicators
including income, psychological wellbeing, education and ecological diversity

Question 15

Explain reasons why less-educated people tend to have a shorter life expectancy than people who have received more education. [4]

Answer 15

• a lower income (1) worse nutrition/healthcare/housing (1)
• less well-informed (1) less likely to eat healthily / more likely to have unhealthy habits e.g. smoking (1)
• more likely to be in a more physically demanding / risky job (1) less choice of occupation due to less skills/qualifications (1).

Question 16

Explain two possible causes of low unemployment. 4

Answer 16

• high levels of economic growth/GDP (1) output requires more workers (1)
• high levels of education and training (1) acquire skills needed for jobs (1)
• high levels of investment (1) high demand for workers (1)
• high levels of consumer spending (1) more production / more labour (1)
• high levels of exports (1) increasing demand for labour
• high government spending / low taxes (1) to stimulate economic growth (1)
• low interest rates (1) encouraging more consumption / investment (1)