Read the passage given below and answer the questions based on your understanding of the passage: When you travel around the world, you see tremendous variation in the standard of living. The average income in a rich country, such as the United States, Japan, or Germany, is more than ten times the average income in a poor country, such as India, Indonesia, or Nigeria. These large differences in income are reflected in large differences in the quality of life. People in richer countries have better nutrition, safer housing, better healthcare, and longer life expectancy as well as more automobiles, more telephones, and more televisions. Even within a country, there are large changes in the standard of living over time. In the United States over the past century, average income as measured by real GDP (gross domestic product) per person has grown by about 2 percent per year. Although 2 percent might seem small, this rate of growth implies that average income doubles every 35 years. Because of this growth, most Americans enjoy much greater economic prosperity than did their parents, grandparents, and great grandparents. Growth rates vary substantially from country to country. In recent history, some East Asian countries, such as Singapore, South Korea, and Taiwan, have experienced economic growth of about 7 percent per year; at this rate, average income doubles every 10 years. Over the past two decades, China has enjoyed an even higher rate of growth-about 12 percent per year, according to some estimates. A country experiencing such rapid growth can, in one generation, go from being among the poorest in the world to being among the richest. By contrast, in some nations in sub-Saharan Africa, average income has been stagnant for many years. Zimbabwe has had one of the worst growth experiences: From 1991 to 2011, income per person fell by a total of 38 percent.
What explains these diverse experiences? How can rich countries maintain their high standard of living? What policies should poor countries pursue to promote more rapid growth and join the developed world? These are among the most important questions in macroeconomics. As the Nobel-Prize-winning economist Robert Lucas put it, "The consequences for human welfare in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else."
In USA, average income of a person is measured by
real GDP
Understanding Average Income Measurement in the USA
The passage discusses the significant variations in the standard of living and average income across different countries and over time. It highlights how these income differences correlate with the quality of life, impacting factors like nutrition, housing, healthcare, and life expectancy.
When focusing on the United States, the passage specifically mentions how the average income of a person is measured.
Let's look at the relevant sentence from the passage:
"In the United States over the past century, average income as measured by real GDP (gross domestic product) per person has grown by about 2 percent per year."
This sentence directly states the measure used for average income in the USA according to the passage.
Analyzing the Options for Measuring Average Income in the USA
Based on the passage, let's examine the provided options:
- Option 1: average GDP
- Option 2: real GDP
- Option 3: GNP
- Option 4: direct tax index
The passage explicitly states that average income in the USA is measured by "real GDP (gross domestic product) per person". While "average GDP per person" or "real GDP per person" are the full terms often used to represent average income or standard of living, the passage simplifies this to "real GDP (gross domestic product) per person" when referring to the measurement of average income growth over time in the US.
Comparing this to the options:
- "average GDP" is mentioned, but the passage qualifies it further with "real" and "per person".
- "real GDP" is specifically included as part of the measurement term "real GDP (gross domestic product) per person" in the passage. This is the core component identified.
- "GNP" (Gross National Product) is not mentioned in the passage as the measure for average income in the USA.
- "direct tax index" is not mentioned at all in the passage as a measure of average income.
Therefore, based on the direct information provided in the passage, "real GDP" is the most accurate representation among the given options for how average income in the USA is measured.
Revision Table: Key Concepts from Passage
| Concept | Description from Passage |
|---|---|
| Standard of Living Variation | Tremendous differences around the world (rich vs. poor countries). |
| Income Differences | Rich countries (USA, Japan, Germany) have >10x income of poor countries (India, Indonesia, Nigeria). |
| Quality of Life | Reflects income differences (nutrition, housing, healthcare, life expectancy, possessions). |
| Average Income Measurement in USA | Measured by real GDP per person. |
| US Growth Rate (past century) | About 2 percent per year. |
| Doubling Time (2% growth) | Every 35 years. |
| Rapid Growth Countries | East Asia (Singapore, South Korea, Taiwan) ~7% (income doubles every 10 years); China ~12% (faster). |
| Stagnant/Falling Income | Some sub-Saharan African nations; Zimbabwe (-38% from 1991-2011). |
| Important Macroeconomic Questions | Explaining diverse growth experiences, maintaining high standard of living, promoting rapid growth in poor countries. |
Additional Information: Understanding Real GDP per Person
The passage highlights the importance of real GDP per person in understanding average income and standard of living. Here's a bit more detail:
- GDP (Gross Domestic Product): This is the total value of all finished goods and services produced within a country's borders in a specific time period.
- Real GDP: This is GDP adjusted for inflation. It measures the volume of production, giving a clearer picture of economic growth over time without being skewed by price changes.
- GDP per Person (or per capita): This is calculated by dividing the total (real) GDP by the country's population. It provides an average measure of economic output per person, often used as an indicator of average income and material well-being.
Measuring average income using real GDP per person allows economists to compare living standards across countries of different sizes and track changes in material prosperity over time, adjusting for inflation and population growth.
Important Questions from Information Science & Industry
The term Knowledge - based Economy was coined by
Arrange the steps that are required in a general framework for compiling any IACR product as stated by Prof. A Chatterjee
A. Planning and preparation
B. Determination of scope
C. Initiation
D. Processing and organization of information
Choose the correct answer from the options given below
Arrange the steps of the Data mining process in a proper logical sequence.
(A) Select suitable algorithm
(B) Prepare Data pattern
(C) Choose an available analytical package
(D) Select suitable databases from the data warehouse
Choose the correct answer from the options given below:
Identify the intermediaries of an information industry among the following
A. Invisible colleges
B. Online Vendors
C. Computer Programmers
D. Students and Research Scholars
Choose the most appropriate answer from the options given below
Match List I with List II
LIST I
LIST II
IACR Products
Types
A.
Trend related publications
I.
Handbooks
B.
Condensing publications
II.
Indexing periodicals
C.
Ready reference publications
III.
State-of-the-art report
D.
Trade and industry-related publications
IV.
Technical reports
Choose the correct answer from the options given below:
