Economics
GDP and Welfare
Practice questions
Two countries have equal real GDP per capita but the first has much greater income inequality. Which statement about welfare comparison is correct?A factory raises output but also causes severe air pollution. What is the likely effect on GDP and welfare?In which situation will GDP rise without a necessary increase in real social welfare?If a family previously cooked at home and now buys the same meals from the market what happens other things equal?Real GDP grows by five percent and population grows by eight percent. What approximately happens to real GDP per capita?A country's GDP rises because reconstruction spending surges after a natural disaster. Which statement about welfare is most appropriate?What is the main purpose of green GDP?If the government builds a public park that is free to use what is correct regarding the construction expenditure?A student studies independently and then purchases the same teaching service from a private tutor. What is the GDP difference?Real GDP per capita rises but average working hours also rise sharply and leisure falls. Which conclusion is appropriate?If spending on security services rises because crime increases what relationship may exist between GDP and welfare?Two economies have the same real GDP but one has half the population. Other things equal which is likely to have the higher average material living standard?Which option is most likely to make GDP growth overstate welfare growth?If digital services become free after previously being paid for what effect is possible on measured GDP and consumer welfare?If a country's real GDP index is one hundred twenty and its population index is one hundred ten what is the approximate real output per capita index relative to the base year?In one country much household work is unpaid while in another the same services are purchased in markets. Despite equal real services whose GDP will appear higher?A country's real GDP growth comes mainly from producing military weapons. Which statement about civilian welfare is appropriate?Why does GDP per capita become a weak welfare indicator when a large share of national income goes to a few individuals?If traffic congestion raises fuel consumption and vehicle repair spending what outcome is possible?When is the positive relationship between GDP and economic welfare most reliable?