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If a country's GDP rises but working hours increase substantially and leisure falls, what caution should be kept about welfare?

Answer and explanation

Correct answer: Welfare may not have increased in the same proportion

GDP records the market value of final goods and services produced, but it does not directly value leisure, unpaid household work, stress, or the disutility of longer working hours. Thus, GDP may increase while an important non-monetary component of welfare declines. GDP growth alone cannot prove proportional growth in overall welfare.

Related tags

GdpWelfareLeisureLimitations Of GdpGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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