13.Explain how economics measure an economy\'s standard of living and suggest wa

Question

13.Explain how economics measure an economy's standard of living and suggest ways in which it can be increased. explain in 50 words

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Explanation / Answer

Standard of living is measured by real gdp per capita. Real gdp is the sum total of value of goods and services produced in the country measured at constant dollars. Real gdp per capita takes into account, that is it is equal to real gdp divided by population in the country.

It can be increased by increasing production level or increasing wage rate which further increases consumption spending and thereby output.

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