Economics
GDP and Welfare
Practice questions
Which change can reduce current welfare without lowering GDP?In an economy, weapons production rises while consumer-goods production falls and total GDP remains unchanged. What conclusion about welfare is appropriate?If the real GDP index rises from 120 to 126 and the population index rises from 100 to 108, what is the direction of real output per person?A country expands free access to public parks without additional market payment. What is the possible effect on welfare and GDP?If a disease outbreak greatly increases sales of medicines and hospital services, what may be the relationship between GDP and welfare?Real GDP is the same in two periods, but product quality is better in the second period and the price index fails to capture the improvement. What may result?Which statement best describes the relationship between GDP and economic welfare?If a rich household hires a domestic worker, the service enters GDP, but the same work done by a family member generally does not. Which limitation does this show?A country's total real income rises but the median income of citizens falls. What does this indicate?A government counts timber obtained from cutting trees as output but does not record depletion of natural forests. What bias may arise in GDP?If real GDP per capita rises but average life expectancy falls, what is the appropriate conclusion?In a year, real GDP is ₹900 crore and population is 15 lakh. What is real GDP per capita?In a country, traffic congestion and commuting time rise sharply along with total output. Why should commuting time be included in welfare analysis?If a country records higher GDP by increasing military expenditure because of war, which question is most important for civilian welfare?If digital services are free to users and financed by advertising, what difference may exist between consumer welfare and GDP?A country's GDP grows rapidly, but the growth is based on excessive exploitation of limited natural resources. What is the concern for long-term welfare?If income distribution is perfectly equal and real GDP per capita rises will welfare definitely rise?Which indicator helps reveal whether increased national income reached the typical person?If worker accidents rise along with output in an economy why may GDP overstate welfare?In which situation would growth in nominal GDP be an especially misleading signal of welfare improvement?