Question

How is the standard of living measured?

a. the GDP plus the GNP
b. by the real GDP per capita
c. total production output per year
d. aggregate supply minus aggregate demand

Answer 1

B. by the real GDP per capita

Step-by-step explanation

Standard of living is best measured by the real GDP per capita. This is because Nominal GDP is not adjusted for inflation which is necessary in order to reflect the true and fair value and to understand the optimal case. Attaining real GDP and then spreading it over the population allows a fair picture to be achieved as to how much is the true change in the standard of that population.