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Economics · May / June 2016 · Paper 12 · Question 21

2281Living standards

A country has a very high Gross Domestic Product and a small population but has a low standard of living. What may be the cause of this low standard of living?

  1. AThere is a high inequality of income distribution and a high provision of merit goods.
  2. BThere is a high inequality of income distribution and a limited provision of merit goods.
  3. CThere is equality of income distribution and a high provision of merit goods.
  4. DThere is equality of income distribution and a low provision of merit goods.

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Correct answer: B. There is a high inequality of income distribution and a limited provision of merit goods.

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