[jmherbener]

Standards of living refer to the quantity and quality of consumer goods we have. We are wealthier if we have more and better consumer goods. We have consumer goods produced in the past and newly produced consumer goods. The spending on newly produced consumer goods during the year is consumption expenditures (C). Consumption expenditures are included in GDP. So C does not indicate our wealth. It only refers to additional consumer goods purchased this year. It also does not tell us the quantity and quality of consumer goods, but only how much was spent to buy them. So C can be larger without the quantity and quality of consumer goods rising.