Economic growth leads to increases in standards of living from "summary" of Principles of Macroeconomics by N. Gregory Mankiw
When an economy experiences economic growth, it means that the economy's total output of goods and services is increasing over time. This growth is measured by the percentage change in real GDP, which is the total output adjusted for inflation. As the economy produces more goods and services, incomes rise and people are able to consume more. This increase in consumption leads to higher standards of living for individuals in the economy.
When incomes rise due to economic growth, people are able to afford more goods and services that improve their quality of life. For example, individuals may be able to purchase better housing, healthcare, education, and leisure activities. As people's basic needs are met and they have more disposable income, they can enjoy a higher standard of living with access to more goods and services that improve their wel...
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