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Why does a rise in national income not automatically prove an increase in economic welfare?

Answer and explanation

Correct answer: Income distribution, environmental quality, and non-market services also matter

Correct answer: B. National income measures the monetary value of income or production, but economic welfare is broader. A rise in income may occur alongside greater inequality or environmental damage, and many non-market services, such as unpaid household work, are not fully reflected in national income. Therefore, national income alone cannot establish that welfare has improved.

Related tags

National IncomeEconomic WelfareGdp LimitationsMacroeconomicsGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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