Question

Which of the following best describes the relationship between productivity and standard of living?

A. A country's standard of living and its productivity are closely related.

B. A rich country can enjoy a high standard of living without the need for high productivity.

C. International trade makes a country's productivity irrelevant.

D. Productivity only increases revenue to investors, while general well-being is not affected.

Answer 1

A country's standard of living depends on the country's ability to produce goods and services that is on productivity. Productivity means the number of goods and service produced from each labour hour. If workers are more productive they can produce a large number of goods and services per labour hour, so they can enjoy a high standard of living. In some cases, rich countries can increase their standard of living by trade without the need for high productivity. But this is for few countries.

Therefore the option A is correct.