ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -However, economists often make adjustments to GDP, such as using real GDP, or use alternative methods for determining the standard of living. Generally, rising global income translates to a higher standard of living, while diminishing global income causes the standard of living to decline.

Detailed explanation-2: -GDP matters because it shows how healthy the economy is Rising GDP means the economy is growing, and the resources available to people in the country – goods and services, wages and profits – are increasing.

Detailed explanation-3: -Standard of living refers to the level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area. Quality of life, on the other hand, is a subjective term that can measure happiness.

Detailed explanation-4: -GDP is an accurate indicator of the size of an economy and the GDP growth rate is probably the single best indicator of economic growth, while GDP per capita has a close correlation with the trend in living standards over time.

Detailed explanation-5: -Increases in material living standards occur with increases in real per capita GDP. d. An important cost of economic growth is the sacrifice of the current consumption in exchange for investment that raises the future output and consumption.