What is in an increase in the standard of living?

1. Higher employment - A high employment rate means that the a country's output will increase also as the country will not have to provide benefits to the unemployed people and can impose taxes on the business to increase their revenue and develop the country, this will result in an increase in the standard of living.

2. Higher Disposable income - When the disposable income rise, the purchasing power of the consumer will also increase, which means that the consumer will purchase more, resulting a rise in the sale and profit of the businesses and so the government can impose high profit tax which will lead to welfare of the economy and so the standard of living will rise.

3. Low inflation rate - When the inflation rate is high, the price of good and services will be relatively high leading to a fall in the sale of the product. This will lead to fall in the profits, rise in the level of unemployment which will lead to a fall in the purchasing power of the consumers and so lower standard of living. So in order to enjoy a high standard of living a lower inflation rate is vital.

4. High wage rate - When the wage rate increase, the workers will spend more resulting an increasing in the sales, profit of the businesses and revenue of the business and so the standard of living will rise.

5. Surplus / Favorable Balance Of Payment - A country is said to have a surplus balance of payment when the value of exports exceeds the imports. This means that the country will be able to enjoy the inflow of foreign currency which leads to economic development and so the standard of living increases.