1. Define and describe GSP? Explain GSP per capita and what influences it to inc
ID: 1141526 • Letter: 1
Question
1. Define and describe GSP? Explain GSP per capita and what influences it to increase or decrease?2. Define and describe cost of living. Explain why the cost of living is higher and lower between states in the US. 1. Define and describe GSP? Explain GSP per capita and what influences it to increase or decrease?
2. Define and describe cost of living. Explain why the cost of living is higher and lower between states in the US.
2. Define and describe cost of living. Explain why the cost of living is higher and lower between states in the US.
Explanation / Answer
1.
GSP is gross state product which captures the total value added in production within a state's economy in a year. Similar to per capita GDP which measures the growth rate of a nation's economy, per capita, GSP calculates the average annual growth rate of a state's economy. Factors which affect a nation's GDP would also affect its states' economy. Hence some of the salient factors are physical capital growth, labor productivity, literacy rate, health indicators etc.
2.
Cost of living is the cost of meeting the requirements necessary to maintain a standard of living. There are changes in the cost of living over time as the economy goes through transitions hence this cost is captured by the cost of living index. This index separates the cost of living in a major city or in a metropolitan area. In 2016, New York city was set as the benchmark to compare the cost of living index of other US cities where San Francisco maintains the highest cost of living due to high rents and food prices. Nevada enjoys a lower cost of living.
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