Standard of Living.

Question 1

What is meant by living standards?

Answer 1

This refers to the social and economic well-being of individuals in a country at a particular point in time.

Question 2

How does GDP per head differ from real GDP per head?

Answer 2

GDP per head measures the average value of annual GDP per person. Real GDP measures the value of national income which is adjusted to inflation.

Question 3

What is the HDI?

Answer 3

It is an indicator of living standards in a country, which consists of Education, Healthcare and Income

Question 4

What are the limitations of using the HDI as a measure of living standards

Answer 4

-HDI does ignores qualitative factors affecting living standards.
-HDI does not take into account environmental and resource depletion resulting from economic growth
-It does not take into account cultural variations
-It lacks accuracy as an indicator of living standards for the average person.

Question 5

What are the main reasons for differences in living standards and income distribution within and between countries?

Answer 5

-Productivity levels
-Role of govt (taxes)
-Size of population
-Level of education
-Level of inflation
-Regional differences