National Income Statistics

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Jocelyn 6.05 Economics Essay To what extent is national income statistics a good indicator of standard of living between countries? Economists always strive to measure the living standards of individuals within a country and compare it with that of other countries. However, we all know that there are two aspects of standard of living, namely the material well-being and non-material well-being. As such, this makes living standards relatively difficult to quantify and measure since the non-material aspect tends to be subjective. Michael Todaro, an American economist believes that a good living standard comprises of the core values of economic growth-sustenance, self-esteem and freedom from servitude and the ability to choose. Nonetheless, many economists have agreed that national income statistics, which measures a country’s total final output, is an easy way to quantify living standards of a country as accurate as possible as well as a means to cross-compare living standards between different countries. To a certain extent, I agree that national income statistics such as Gross Domestic Product (GDP) is a good indicator of standard of living between countries, as the GDP per capita is a reflection of the amount of goods and services per head. Thus, we can assume that the country with a higher real national income per capita enjoy a better standard of living since an individual in that particular country is able to enjoy more goods and services. Furthermore, a higher national income would mean enhancement of living standard in the fields of healthcare, education, civil service and many more as government will allocate a larger amount of increased revenue to subsidize healthcare and the people will be more able to afford the hospital fees and medicine. As a result, life expectancy in the country will be longer. This is proven as the top three countries with the
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