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If domestic output rises but a large share is exported and domestic consumption of essential goods falls, what is possible?

Answer and explanation

Correct answer: GDP may rise while domestic consumption welfare falls

GDP records the value of production, including output sold abroad, so increased exports can raise GDP. However, welfare also depends on whether residents can obtain essential goods and how output is distributed. Option A is correct: average production may increase while domestic consumption welfare declines. B is too absolute, C contradicts the stated rise in output, and D ignores basic consumption needs.

Related tags

Gdp And WelfareExportsDomestic ConsumptionEssential GoodsNational Income And Related AggregatesEconomicsClass 11 Mcq

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