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If GDP increases, welfare will always increase; what kind of statement is this?

Answer and explanation

Correct answer: Incomplete statement

The statement is incomplete because GDP measures the market value of final goods and services, whereas welfare is broader. Welfare may also depend on income distribution, employment quality, pollution, leisure, health, education, public services and non-market activities. Thus, rising GDP can support welfare, but it does not guarantee that every person’s welfare has improved.

Related tags

EconomicsGdpWelfareLimitationsIncome DistributionGdp And WelfareNational Income And Related AggregatesClass 11 Mcq

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