One factor that indicates a developed economy’s Standard of living is its

One factor that indicates a developed economy’s Standard of living is its

A. Growth in outsourcing rates.

B. Strong social connections.

C. High levels of education.

D. Low GDP per capita.

Answer: D. Low GDP per capita.

In as much as the standard of living assumes the qualities of a developed economy, one of the most measurable factors that define it is the Gross Domestic Product Per Capita.

Another important indicator of a nation’s standard of living is gross domestic product per capita because it considers the amount of money produced by a country on a per capita basis. This metric gives information related to the general standards of living and efficiency of a nation’s people in terms of wealth creation. Indeed, the fact is that the countries with the higher GDP per capita have better living standards and more material possibilities, and thus they can provide a broader choice of goods and services for their population.

For instance; Luxembourg, Singapore, and Switzerland are some of the nations that have the highest figures for the GDP per capita. This high level of economic production relative to population usually leads to better-developed infrastructures, advanced or improved health facilities, and enhanced education. Such citizens are normally in a position to afford various home products and other essentials, sophisticated and latest technologies, and comfortable lifestyles.

However, one must stay mindful of the fact that, although the use of GDP per capita is a fantastic measure, there is more to this picture than what this, singular, measure paints. It cannot consider the situation of income disparity as well as the distribution of assets in the respective nations. For example, a country might have a high per capita income that is an implication of high production of goods and services in the economy; but in a real sense, the real income per head might not be high because the few remaining resources have been distributed to a small percentage of the population. That is why in practice, economists employ GDP per capita together with other indicators, such as HDI or Gini coefficient.