John earned the same amount of money this year as he did last year.Thus,his standard of living must be the same as it was last year.
The standard of living refers to the amount of goods people can buy with the money they have.There are two factors that determine the standard of living: a person's earnings and the price of goods and services.If the prices of goods and services have increased or decreased over the past year,John's standard of living will change even if the amount of money he earns is the same.

Question

Quizplus · Accepted Answer

If the prices of goods and services have changed, John's purchasing power and thus his standard of living could be different even if his earnings remain the same.

John Earned the Same Amount of Money This Year as He