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What may happen to welfare if unemployment rises despite GDP growth?

Answer and explanation

Correct answer: Improvement in welfare may be limited

GDP growth measures increased production, but welfare also depends on employment and whether people receive income from economic activity. If unemployment rises, many households may not benefit from the additional output and may face insecurity or lower income. Therefore option B is correct: welfare improvement may be limited. The other choices make absolute claims that GDP growth cannot justify.

Related tags

UnemploymentGdp GrowthEconomic WelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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