A good measure of the standard of a countrys living over tim

A good measure of the standard of a country’s living over time is

a. nominal GDP per capita.

b. real GDP per capita

c. total real GDP.

d. total nominal GDP divided by real GDP.

a.salary of Jane, a US citizen accountant working in Korea

b.profits of Randy the Illegal Drug-Dealer

c.the value of a new garage Sam the School Teacher built himself in his back yard

d.amount of a cash gift an ESC student receives from parents

e.salary of Maria, a citizen of Mexico, working legally at a dental office in Queens

a.$1,300

b.$1,700

c. not enough information

d.$3,000

a.the volume of stock trade and purchase of used cars

b.public transportation services and government transfers

c.clean environment, crime rate and unpaid work at home

d.medical care and education

Solution

A good measure of standard of a country\'s living is real GDP per capita that is linked with consumer price index and indicates actual GDP value of an economy. Therefore, the correct answer is b, real GDP per capita.

The income approach of the US GDP includes salaries, profits, rents, wages and interests earned by people in the US from legal sources. Therefore, the correct option is

e.salary of Maria, a citizen of Mexico, working legally at a dental office in Queens

GDP using expenditure approach = Consumption+ Government purchases+ Investment +Net exports

or, 8000=5000+1500-200+Investment

or, Investment = $1700

Therefore, investment or private investment will be b. $1,700

GDP per capita is not considered as an exact indicator of the country\'s standard of living by many experts. The GDP does not include environment effect on the social wellbeing as well as unpaid services done in the family. It also does not consider income earned illegaly such as theft. Therefore, the correct option is

c. clean environment, crime rate and unpaid work at home