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Does an increase in GDP always show an equal increase in welfare?

Answer and explanation

Correct answer: No, not necessarily

An increase in GDP indicates greater measured production, but it does not automatically mean an equal increase in welfare. Welfare also depends on income distribution, health, leisure, environmental quality, and the nature of the goods produced. For example, output may rise while pollution or inequality worsens. Therefore option B is correct. Options A, C, and D make absolute claims that are not supported by the welfare limitations of GDP.

Related tags

Gdp GrowthEconomic WelfareInequalityEnvironmentGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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