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When will the positive relationship between GDP and economic welfare be stronger?

Answer and explanation

Correct answer: When useful output rises and benefits are broadly distributed

GDP is more likely to reflect economic welfare when its increase represents useful goods and services and the resulting gains reach a broad share of the population. Thus A is correct. Rising pollution, greater inequality, reduced leisure, or spending caused by accidents can raise measured GDP while weakening quality of life, so B, C, and D do not strengthen the relationship.

Related tags

Economic WelfareUseful OutputBroad DistributionGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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