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Why is welfare more likely to rise if real per capita GDP increases and income distribution becomes more equal?

Answer and explanation

Correct answer: Because average output rises and benefits spread more broadly

The governing concepts are real per capita income and distribution. Real per capita GDP adjusts aggregate output for price changes and population, so an increase indicates greater average command over goods and services in real terms. If distribution also becomes more equal, the gains are more widely shared. Therefore option B is correct, although other welfare factors such as health and pollution must still be considered.

Related tags

Real Per Capita GdpEqual DistributionWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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