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Why can poverty exist even when GDP is high?

Answer and explanation

Correct answer: Because GDP does not show income distribution

GDP measures the total market value of final goods and services produced in an economy, but it does not show who receives the resulting income. A high GDP may coexist with severe inequality if most income is concentrated among a small group. Therefore, poverty and welfare must also be assessed using distributional and social indicators.

Related tags

EconomicsGdpWelfarePovertyIncome DistributionGdp And WelfareNational Income And Related AggregatesClass 11 Mcq

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