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If per capita GDP rises but housing costs rise even faster what may happen to urban households?

Answer and explanation

Correct answer: Their housing-related welfare may fall

The governing concept is that real welfare depends on purchasing power and living costs, not income alone. If per capita GDP rises more slowly than housing costs, households may have to devote a larger share of income to rent or mortgages, leaving fewer resources for food, education, health and leisure. Their housing-related welfare may therefore fall. Option A ignores inflation in housing, while C and D are unsupported extremes.

Related tags

Housing CostPer Capita GdpCost Of LivingWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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