The Concepts of Economics

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Concepts of Economics The principal limitation in utilizing national income accounts for representing the standard of living within a particular country or even throughout the world in general is that there is a very basic assumption in this methodology. That assumption, of course, is that the standard of living is equated with consumption. Areas of the world that have higher national incomes as represented via a variety of different ways such as per the calculation of the Gross National Product or the Gross Domestic Product have the ability to purchase more. As such, they are likely (but not definitely) to have fewer problems in terms of basic human standards such as being able to provide food, clothing and shelter for an individual and his or her family. However, this monetary method of determining the national standard of living does not take into account other aspects of living, or hallmarks of civilizations even. When someone looks back to the historical plaudits for previous societies such as those in Egypt or in Ancient Greece, for instance, it is quite clear that these societies have not been garnered international approbation because people were able to consume or spend money. This example alludes to the fact that there are other ways of analyzing the national standard of living. Certainly, money does play some role in calculating such a standard. But there are other vital considerations in regards to culture and elements of aesthetics which monetary calculations

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