Discuss the view that economic growth leads to improvements in people's standards of living.

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Navdeep Gill        11E        Mr. Hansen

Discuss the view that economic growth leads to improvements in people’s standards of living

        First of all, the people’s standard of living is really based on different factors. The standard of living is how well off an individual or a nation is at a point in time. There is no precise way to measure the standard of living but we can analyse statistics to build up an impression of the standard of living of a nation, give or take certain conditions. National income can be a good indicator of the standard of living but certain factors such as unrecorded work, inflation, dispersion of wealth Some economists believe that the standard of living is basically the real national income in the context of the population. Therefore, a high standard of living means that the household consumes a large number of goods and services. Another way to calculate standard of living is to calculate the percentage of people who own consumer durables like cars or televisions and an increase in ownership means an increase in the standard of living. Lastly, standard of living can be calculated by how much time it takes an average person to earn enough money to buy certain goods. In other words, if people have to work less time in order to buy the same goods then the standard of living has increased. However, an increase in the standard of living may not mean a better life-style for the majority as the wealth may not be spread out evenly, the increase in output brings an increase in congestion or pollution, leisure time is shortened to produce the goods and there is an increase in the amount of stress and anxiety.

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        Economic growth, by definition, is an increase in national income over a period of time. The national income statistics must, however, be displayed in real terms (i.e. with the factor of inflation taken out). National income usually rises each year but the rate of growth fluctuates over time. As there is growth the overall production and output increases but this does not always mean a better standard of living. The principal difference between economic growth and development (increase in the standard of living) is that a country that has attained economic growth would not necessarily have also attained economic development. ...

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