,SECTION A [20 Marks]
A1 Comparative Living Standards, Savings, and
Economic Growth (a) Discuss how the measurement of
living standards between countries can influence our
understanding of economic growth. (6) (b) Using real life
examples, explain the role of savings in promoting
economic growth and how differences in savings rates
between countries might affect their long-term growth
prospects. (4) A2 Technological Progress, Unemployment,
Inequality, and Economic Growth Questions (a), (b) and
(c) are based on the following table: (a) Using the data
provided in the table, discuss the relationship between
technological progress and economic growth. (6) (b)
Based on the information in the table, explain how
technological progress might affect income inequality in
these countries. (2) (c) Mention and explain any two
potential determinants of technological progress that could
explain the differences across countries. (2)
, A1. Comparative Living Standards, Savings, and
Economic Growth
(a) How the measurement of living standards
between countries can influence our
understanding of economic growth (6 marks)
The measurement of living standards provides
insights into the quality of life, which affects our
understanding of economic growth beyond just GDP
numbers. Common indicators used to measure living
standards include:
1. GDP per capita: Higher GDP per capita
suggests better living standards, but it may not
account for income inequality or how wealth is
distributed within a country. For instance, the
United States may have high GDP per capita,
but disparities in income distribution affect the
actual living standards of the lower-income
population.
2. Human Development Index (HDI): HDI
incorporates education, life expectancy, and per
capita income. It offers a broader perspective on
how growth affects social well-being. For
example, Norway ranks high on the HDI despite
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