gcse economics - how we live - standard of living

How well off an individual or nation is at a point in time. One important, but not perfect measure is the level of GDP.

WAYS OF MEASURING THE STANDARD OF LIVING IN A COUNTRY

• GDP in the UK is £1,300,000. This suggests that the UK is quite a rich and prosperous country. But is doesn’t tell us about individuals.

• GDP per person is £16,000. On average each person receives this amount of money per year. But it is only an average.

OTHER WAYS (wealth / material)

• How unequal is UK society? Do some people earn £1,000,000 and others very little?
• Number of material goods owned by people e.g. cars, TV’s, mobiles
• Quality of life e.g. stress, congestion, crime rates
• Number of holidays per year.

OTHER WAYS (social)

• Number of patients per doctor
• Infant mortality rates
• % of the population that can read or write
• Average food intake per person

OVERALL

It is important to consider all of these measures in order to work out an individuals standard of living, but it is not possible to come up with a precise measure.

ACTION

a. Why is GDP used an indicator of the standard of living?
b. Which do you think are the best indicators of the standard of living?
c. Why are social and environmental factors important in measuring the standard of living?

 SMART THINKING

d. Why might an increase in cigarette consumption lead to an increase in GDP but a fall in the standard of living?