In Macroeconomics, what is the best measure of improvement in the standard of living of a nation?

Question

The choices are:

growth of nominal GDP, growth of real GDP, growth of real GDP per capita, and growth of national income.

I don't think that nominal GDP grows.

I am leaning to believe that the growth of the national income is the correct answer.

Please list your qualifications for answering this question.

Answer 1

First of all, nominal GDP simply means actual GDP. In other words, it's not adjusted at all, but rather the "raw number." By contrast, real GDP is adjusted to provide a level playingfield and better compare one period to another.

The KEY here is per capita, which means per person. And it's the people who you look at when considering standard of living. So your answer would be growth of real GDP per capital.

Growth of national income simply means the country is making money, which is growth in GDP, but that doesn't mean that it's per person.