Our standards of living is most closely related to ?
Correct answer: C. our productivity because our income is equal to what we produce
- A. how hard we work:
- B. our supply of capital because everything of value is produced by machinery
- C. our productivity because our income is equal to what we produce
- D. our supply of natural resources because they limit production
Explanation
Standards of living depend most directly on productivity, because higher output per worker supports higher incomes and consumption. Hard work, capital and natural resources matter, but their contribution is reflected through productivity.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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