Increases in an economic system's standard of living result primarily from increases in ________.
A) balance of trade
B) real GNP
C) productivity
D) nominal GDP

Question

Quizplus · Accepted Answer

Productivity measures the output per unit of input, which means that if productivity increases, we can produce more goods and services with the same amount of resources, thereby increasing the standard of living. In contrast, balance of trade (A) refers to the difference between a country's exports and imports, which does not necessarily have a direct impact on the standard of living. Real GNP (B) and nominal GDP (D) measure the size of an economy and its output, but do not directly measure changes in the standard of living.

Increases in an Economic System's Standard of Living Result Primarily