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Which statement is the most careful regarding GDP and welfare?

Answer and explanation

Correct answer: GDP growth may increase welfare but not always

GDP measures the market value of final goods and services produced, so higher GDP can indicate greater availability of goods, services and income. However, it does not fully measure welfare because it may ignore income distribution, unpaid household work, leisure, pollution, resource depletion and the quality of life. Therefore, GDP growth may improve welfare, but it cannot guarantee it.

Related tags

GdpWelfare LimitationsMacroeconomicsNational IncomeGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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