What will cause the standard of living to increase?

Question

Quizplus · Accepted Answer

A higher rate of real GDP growth means a larger output of goods and services, which can increase the standard of living. However, if population growth is faster than the growth of real GDP, the increased output will be spread amongst more individuals, so each person's standard of living will not necessarily increase. On the other hand, if population growth is slower than the growth of real GDP, the increased output can lead to a higher standard of living for each individual. Option A is incorrect because nominal GDP growth is not directly related to changes in the standard of living. Option C is incorrect for the reasons explained above. Option D may or may not lead to an increase in the standard of living depending on the population growth rate.

What Will Cause the Standard of Living to Increase