Our standard of living is most closely related to
A) how hard we work.
B) our supply of capital, because everything of value is produced by machinery.
C) our productivity, because our income is equal to what we produce.
D) our supply of natural resources, because they limit production.

Question

Quizplus · Accepted Answer

Our standard of living is closely related to our productivity, because our income is equal to what we produce. This means that the higher our productivity (i.e. the more we produce), the higher our income and therefore our standard of living. While factors such as supply of capital and natural resources can certainly impact productivity, our level of productivity is ultimately determined by how efficiently we are able to use these resources. Therefore, productivity is the most directly related factor to our standard of living.

Our Standard of Living Is Most Closely Related to