A good measure of the standard of living usually used for international comparison is_______

1. Analyze the question The question asks which measure is best for comparing the standard of living across different countries. The key phrase is "international comparison."

2. Explain the concept Standard of living refers to the level of wealth, comfort and material goods available to the average person in a country. Because countries have very different population sizes, a total figure doesn't tell us how well off the average citizen is.

• GDP, GNP and NNI are aggregate (total) measures of a country's output or income. A country with a huge population (like Nigeria, India or China) will have a large total, but that total is shared among many people.
• Per capita income (PCI) = National Income ÷ Total Population. It shows the average income per person, which adjusts for population size.

3. Step-by-step solution

• Take two countries: Country X has a national income of $500 billion and a population of 250 million, and Country Y has a national income of$300 billion and a population of 30 million.
• Country X's PCI = 500 billion ÷ 250 million = $2,000.
• Country Y's PCI = 300 billion ÷ 30 million = $10,000.
• Although X has the larger total income, the average person in Y is much better off. Only PCI reveals this.

4. Answer The correct option is A. Per capita income (PCI).

5. Exam tip When you see "standard of living" together with "comparison between countries," think "per capita", meaning "per head." Totals (GDP, GNP, NNI) measure the size of an economy, while per capita figures measure the average well-being of its people.

(Note: option B is printed as "GND," which is likely a typo for GNP, but it doesn't change the answer.)