Summary IGCSE Economics Section Unit 5 Revision Notes
10 views 0 purchase
Course
IGCSE Economics
Institution
IGCSE Economics
IGCSE Economics Section Unit 5 Revision Notes. Living Standards
Living standards or standards of living refer to all the factors that
contribute to a person’s well-being and happiness
Measuring Living Standards
GDP per head/capita: this measures the average income per person
in an econom...
Living Standards
Living standards or standards of living refer to all the factors that
contribute to a person’s well-being and happiness
Measuring Living Standards
GDP per head/capita: this measures the average income per person
in an economy.
Real GDP per capita = Real GDP / Population
Merits of using GDP per capita to measure living standards:
GDP is a useful measure of the total production taking place in the
country, and so indicates the material well-being of the economy
it also takes population into consideration, adding emphasis on the
goods and services available to individuals
since it is calculated on output, is a good indicator of the jobs being
created
GDP data is readily available so is population data
Limitations of using GDP per capita to measure living standards:
it takes no account of what people can buy using their
incomes. A country with a high GDP per head may be no better off
than a country with a low GDP per head, if there are far fewer products
to choose from
similarly, GDP doesn’t consider changes in technology that can
have a large impact on living standards. People might have had
more income in the last decade but they couldn’t benefit from all the
technology available today
distribution of income is very unequal in reality, so the GDP per
head isn’t accurate. Some people might be very rich while others very
poor, but the GDP per head will only give the average incomes
real GDP excludes the unpaid work people do for charities and
voluntary organizations etc. Thus, it understates the total output
GDP also doesn’t differentiate between the positive and
negative values economies place on different
output/expenditure. For example, if the output rises because the
sales of tobacco, alcohol or pornographic materials, it might show in
the records as a rise in GDP per head but might not actually make
people better off. Similarly, GDP might rise if the government has to
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller SOLUTIONS2024. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
