What economic indicator is often used to gauge the standard of living in a country?

GDP per capita is a crucial economic indicator used to gauge the standard of living in a country. It represents the total economic output of a country divided by its population, providing a per-person measurement of economic activity. This indicator is widely utilized because it offers a clearer picture of how prosperous a country feels to its citizens. A higher GDP per capita typically indicates a higher standard of living, as it suggests that individuals have access to more goods and services.

When assessing the standard of living, other indicators, such as the consumer confidence index, employment rate, and inflation rate, may provide valuable insights, but they do not directly measure economic output relative to the population size. The consumer confidence index reflects consumers' optimism about the economy, which can influence spending behavior but does not represent actual living standards. The employment rate indicates the percentage of the workforce that is employed but may not accurately convey income levels or economic prosperity per capita. Meanwhile, the inflation rate measures the change in the price level of goods and services over time, impacting costs of living rather than directly reflecting economic output or living standards. Therefore, GDP per capita stands out as the most effective single metric for evaluating the standard of living in a country.