Chapter 1: Ten Principles of Economics- Principle 8: A Country's Standard of Living Depends on I
The eighth principle of economics, a country's standard of living depends on its ability to produce goods and services, can be seen throughout the world. The differences in living standards around the world are astounding. Citizens of the higher standard of living countries have more cars and televisions on average. Everything revolves around productivity, the number of goods/services produced per unit of labor. There is a correlation between the nation's productivity growth rate and income growth rate. As discussed in this principle, the productivity and standard of living relationship can be seen in history, during the late 20th century America, or even modern America.
Examining the United States during the late 20th century, there was an increase in competition from Japan starting in the 1970s, however it was not the competition abroad that people noticed, it was the productivity growth back in the United States that was truly affected. Thus, this shows how a country's standard of living is dependent on its ability to produce goods and services, since Japan was producing goods and services that the United States normally would have.
Like the Japan and United States example, the United States can be reexamined, like discussed in the U.S. News article, "Quality of Life". Canada ranks number one on the list, because they ranked "...the North American country top for its well-developed education system". Canada's ability to produce goods/services such as education make it so Canada has the highest standard of living. As shown, the United States provides a real example of a country's standard of living depending on its ability to produce goods and services.