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Why may welfare rise even with a limited change in GDP if public transport becomes cheaper and faster?

Answer and explanation

Correct answer: Because time and travel costs are saved

The governing concept is that GDP does not capture every improvement in welfare. Cheaper and faster public transport reduces fares and commuting time, leaving people with more money and time for work, rest, education, or family activities. Therefore, option B is correct. Tax abolition, population decline, or vehicle imports do not necessarily follow from better transport and do not explain the welfare gain.

Related tags

Public TransportTime SavingTravel CostWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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