Question

How are economic growth and a person’s well-being related? Note to the Tutor: Please be consise, clear and explanatory, will be appreciated.

Answer 1

Economic growth and a person’s well-being are closely and positively related. Economic growth is reflected by an increase in GDP. An increase in GDP, creates new job opportunities and unemployment rate decreases. It increases the demand of labor and wages also increase. It means that there are increased levels of disposable income and subsequent increase in purchasing power. It makes the person to spend upon education, health care and other necessities. As a result, the well being of the person improves. So, positive economic growth translates into the improvement in the well-being of the person.
Though, the degree of improvement in well-being, depends upon the degree of equality in income, equality in resource distribution and sound government policies. It is the reason that a country like Switzerland has superior well-being of a person in comparison to the person of India and China, though India and China has superior size of GDP and GDP growth.