Final answer:
To encourage a higher standard of living, a successful economy must foster conditions for economic growth(option B), such as a well-educated workforce, innovation, and stable political and macroeconomic environments.
Step-by-step explanation:
A successful economy will encourage a higher standard of living primarily by fostering conditions for economic growth. This approach involves creating a supportive environment for human capital deepening, physical capital deepening, and technological gains within a market-oriented economy complemented by constructive government policies.
Guiding principles for economic growth include educating the workforce, improving health conditions, encouraging innovation, ensuring macroeconomic stability, and establishing political stability. These factors can lead to increased foreign aid and investment while propelling innovation and technology in higher-income countries to maintain their economic status.
Strategies like decreasing taxes for the highest earners might not consistently contribute to a broad rise in living standards, and focusing on labor-intensive methods over capital-intensive ones may not enhance overall productivity.
Lastly, while increasing welfare payments may alleviate immediate hardships, it does not inherently drive economic growth. Therefore, the correct option for a successful economy to encourage a higher standard of living is B. fostering conditions for economic growth.