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If real GDP rises but average working hours increase sharply what is the correct welfare assessment?

Answer and explanation

Correct answer: Total welfare may be limited because leisure declines

The governing concept is that GDP measures marketed production, not complete human welfare. If real GDP rises, output has increased in inflation-adjusted terms, but sharply longer working hours reduce leisure, which is itself valuable. Thus option B is correct: welfare may rise less than GDP suggests or even face offsetting costs. A ignores leisure, while C and D are unsupported.

Related tags

Real GdpWorking HoursLeisureWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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