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Why is it risky to treat national income and economic welfare as identical in macroeconomics?

Answer and explanation

Correct answer: National income does not fully show non-market activity and distribution

National income indicates the monetary value of recorded production and income, so it is related to welfare but not identical to it. It may omit unpaid household services, informal activity and environmental costs, and it does not show distribution. Welfare also depends on health, education, security, leisure and quality of life.

Related tags

National IncomeWelfareLimitationsGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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