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Chapter 15, Question 14:

The standard of living refers to the type of level of comfort, material goods, wealth and desiderata that we are utilized too. Or which are available to certain class or in a certain area within a country. To begin with, the gross domestic merchandise brush offs the production that has economic value. Nor volunteer work or unpaid domestic accommodations such as social work, habitat for human beings and other social networks that aid people. This also includes people that do housework, child rearing, and do-it-yourself home amelioration make it into the separate accounts, and the standard of living, with the overall level of economic salubrity benefits greatly towards both accounts. It also does not include the vast economic welfare that we acquire directly from the outside of other marketplaces.

”The standard of living is a measure of the material welfare of the inhabitants of a country. The baseline measure of the standard of living is real national output per head of population or real GDP per capita. This is the value of national output divided by the resident population. Other things being equal, a sustained increase in real GDP increases a nation’s standard of living providing that output rises faster than the total population”. (Riley, 2006)

So we must be reminded that the real income per capita on its own is both an imprecise and other countries insufficient sign of the true domiciliation standard. Both within and between all. To do rough comparing’s between other countries which aid with the calculation towards the cost of standard of domiciliation this income data can be used. ”This would require:

•Converting GDP data into a common currency (normally the dollar or the Euro or other currencies)

•Making an adjustment to reflect differences in the average cost of goods and services in each country to produce data expressed at a ‘purchasing power parity’ standard.” (Riley, 2006)

With the GDP data on its own,...