A nation's standard of living is determined bya. the percentage of its GDP that is accounted for by government purchases. b. the quantity of natural resources with which it is endowed. c. the productivity of its workers. d. factors and events that are beyond the nation's control.

Question

Campbell Mendez

Business

13 October, 16:40

A nation's standard of living is determined bya. the percentage of its GDP that is accounted for by government purchases. b. the quantity of natural resources with which it is endowed. c. the productivity of its workers. d. factors and events that are beyond the nation's control.

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Answers (1)

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Edith Carney · Answer 1

C) The productivity of its workers.

Explanation:

Among the options listed, the productivy of its workers is the measure most strongly correlated with the nation's standard of living. The reason for this is that, according to economic theory, real wages depend on the marginal product of labor, thus, the higher the productivity of a worker, the higher his wage.

In reality the relationship is not perfect, but quite close.

Nations with highly productive workers such as Germany, the United States or Japan have a high standard of living, while nations with low labor productivity such as Haiti or Nigeria have a low standard of living.