Which of the following best describes the assumption economists make about the relationship between GDP and standard of living?

• A. GDP is unrelated to standard of living and happiness.
• B. Higher GDP always results in a higher standard of living and increased happiness.
• C. Lower GDP always results in a lower standard of living.
• D. Higher GDP is assumed to correlate with a higher standard of living, but it may not reflect non-economic factors affecting happiness.

Answer: (D)