Predicting the U.S.’s standard of living in the future is therefore based on the past and its current standard of living. However, prior to anticipating what to come in the future, it is also important to know how exactly to evaluate the standard of living of a nation in general. This is also emphasized in the paper.
In Western Nations particularly in the United States, the standard of living is moving to an upward spiral trend. It is quite simple to believe on this. However, there must be enough bases prior to believing on this. It is good to consider how exactly to measure standard of living. Household income and expenditures per capita plus own production can be essential yardsticks for measuring standard of living; however such should be included with health, life expectancy, literacy, and access to public goods or common property resources (World Bank, par. 5). Mostly, all of these yardsticks for the standard of living are commonly used in measuring the country’s standard of living. A country with high household income and expenditure but receiving poor health system, can be considered having poor quality of living. In the same way, a higher literacy rate does not necessarily imply that the country has high quality of living. In fact, even if there is higher literacy rate, but the life expectancy rate is shorter, then there must be an implication that there is an existing poor quality of living.
Even though it is not a perfect measure of the cost of living, price index can also try to gauge the cost of living (Mankiw, 298). There are many noted disadvantages about price index and this only implies that it cannot be the best tool to gauge the existing standard of living of the country. However, because of some of its important economic implications, at some point there is remarkably significant connection between price index and