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Why may welfare differ between two societies with the same real per capita GDP?

Answer and explanation

Correct answer: Because of differences in income distribution, leisure, environment, and public services

Real per capita GDP is an average measure of inflation-adjusted production or income per person. Averages can be identical even when one society has a more equal distribution, cleaner surroundings, more leisure, safer conditions, or better public health and education. These factors affect quality of life but are not fully captured by the indicator. Thus B is correct. The measure is useful, so A is too extreme, while currency names and physical size alone do not explain the welfare difference.

Related tags

Welfare ComparisonIncome DistributionPublic ServicesPer Capita GdpGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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