Question

How can a nation increase its standard of living?
Begin by defining the concept of standard of living. Be sure to include and example, with your explanation.

Answer 1

Standard of living of a nation means the level of economic and social well being available to the citizens of that nation. It measures the comfort, goods and services and other facilities/benefits available to the people of the country.

In order to increase the standard of living of the people of a nation, the following can be done :

Decreasing Unemployment : One of the biggest issues in a nation is unemployment. When the people of a nation are ready to work but are not able to find work, it is called unemployment. Unemployment is an economic and social problem which hamper the growth of GDP or production in the country, as well as the issue of unemployment creates a large pool of unemployed and unproductive population. To increase employment, government can take several steps like expansionary fiscal policy, government projects, unemployment benefits, etc.

For example, cutting down interest rates and reducing taxes boosts aggregate demand which helps in reducing unemployment. Education and skill training for unemployed personnel, subsidies to producers, etc. can also reduce unemployment.

US & UK have worked to reduce unemployment immensely after 2008-2009 recession by taking the above steps mentioned here and have been successful in reducing the unemployment prevalent in their respective countries.