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If everyone feels safer but the improvement occurs without additional market production what will happen?

Answer and explanation

Correct answer: Welfare may rise while GDP remains unchanged

GDP is an indicator of measured market production and expenditure, not a complete index of quality of life. A genuine improvement in safety can increase people’s utility and welfare even when no extra service is bought or sold. Thus recorded GDP may remain unchanged while welfare rises, making option D correct. Options A and B treat GDP as an automatic measure of every social improvement.

Related tags

SafetyNon-Monetary-WelfareGdp-UnchangedQuality-Of-LifeGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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