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What must be known to interpret welfare correctly when the value of medical services rises in GDP?

Answer and explanation

Correct answer: Whether the rise came from better healthcare or more illness

The governing idea is that an increase in medical expenditure has an ambiguous welfare meaning. It may reflect improved and more accessible healthcare, which can raise well-being, or greater illness and suffering, which can lower it. We must identify the cause before judging welfare. Therefore option B is correct; the other choices have no direct economic relevance.

Related tags

Medical SpendingHealthcareWelfare InterpretationGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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