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If a large part of GDP accrues as profits to a few companies while wages remain stagnant, what does this indicate?

Answer and explanation

Correct answer: The gains from output may be distributed unequally

GDP includes the value of production and the incomes generated by it, such as wages and profits. It does not show that these gains are shared equally. If profits rise for a few companies while wages remain stagnant, the distribution of income may be unequal, so broad welfare gains are not guaranteed. Therefore, option B is correct.

Related tags

Gdp And WelfareIncome DistributionNational Income And Related AggregatesEconomicsClass 11 Mcq

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