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Consider the Following Statement: "An Increase in Per Capita Income

Question 104

Multiple Choice

Consider the following statement: "An increase in per capita income guarantees an increase in living standards." Is this statement true or false,and why?


A) False.Living standards have no statistical correlation with per capita income,and so such a guarantee is not possible.
B) False.Per capita income could be increasing while at the same time living standards are deteriorating due to,for example,environmental degradation or a decline in social cohesion.
C) True.The measure of living standards is a subset of per capita income,so when one measure increases,the other measure must also increase.
D) True.Per capita income is the most important contributor to living standards.
E) Impossible to determine because "living standards" is a subjective concept that cannot be measured.

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