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Why does GDP not provide correct information about income distribution?

Answer and explanation

Correct answer: Because it shows total output and not its distribution among people

GDP is an aggregate measure: it adds the value of production across the economy, but it does not identify which households or groups receive the resulting income. A country may have high GDP with substantial inequality if a large share goes to a small section of society. Option D is correct. The other options misdescribe GDP because it is not restricted to agriculture, imports, or prices alone.

Related tags

Income DistributionTotal OutputInequalityGdpGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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