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Two countries have equal total GDP but one has highly unequal income distribution. Which conclusion is more likely?

Answer and explanation

Correct answer: Broad welfare may be lower in the more unequal country

The governing concept is that aggregate GDP measures the size of production but does not show how income and output are distributed. Two countries can have the same total GDP while one concentrates gains among a small group and leaves many people with lower living standards. Thus option D is the most appropriate conclusion. Options A and C treat GDP as complete welfare information, while B makes an unsupported universal claim.

Related tags

Total GdpIncome InequalityBroad WelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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