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If total real GDP remains constant but the average workweek becomes shorter, what is a possible welfare outcome?

Answer and explanation

Correct answer: Welfare may rise because of greater leisure

Real GDP measures the quantity of final production after adjusting for prices, but it does not directly value people’s free time. If the same total output is produced with fewer average working hours, people may obtain more leisure, rest, family time, or personal activities. These benefits can increase life satisfaction even though measured GDP is unchanged. The result is only a possibility, because income distribution, job quality, and the use of additional leisure also matter.

Related tags

LeisureWorking HoursReal GdpWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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