Standard of Living and Macroeconomics Indicators
H2 Economics - syllabus 9570, 2026
Original teaching notes
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Read GDP, prices, employment and inequality data. Judge whether people are better off and explain what else you need to know.
- What counts as a better standard of living?
More consumption is one part of a better life.
- GDP or GNI: whose output and income?
Production within an economy differs from income due to its residents.
- Did output rise, or did prices rise?
Nominal growth can reflect higher prices without more production.
- Did output keep up with the population?
Total output can rise while output per person falls.
- Read the price index before judging inflation
The index level and its rate of change answer different questions.
- Does a lower unemployment rate mean more jobs?
Read the numerator and denominator together.
- Who receives the gains?
An average and an income-distribution measure tell different stories.
- What does HDI add to income data?
Health and education broaden the comparison, but HDI is still a summary.
- Has life improved over time?
Compare like with like and distinguish levels from growth rates.
- How do you compare two countries?
Adjust for people and purchasing power before comparing average resources.
- What does higher GDP leave out?
Ask what production adds, what it costs and whether it can last.
- Turn the indicators into a judgement
Choose evidence that answers the claim, then weigh the main qualification.
- What does the external balance tell you?
Trade is one part of an economy's transactions with the rest of the world.