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If GDP growth mainly comes from luxury goods while basic public services deteriorate what is the appropriate welfare conclusion?

Answer and explanation

Correct answer: Output has increased but the change in social welfare may be uncertain and uneven

GDP measures the value of market production, but welfare also depends on the composition and distribution of that production and on access to public services. Luxury output may benefit high-income consumers while deteriorating basic services harms broader groups. Hence output has risen, but the total welfare change can be uncertain and unequal; option B is correct. The other statements are absolute or factually false.

Related tags

Luxury-GoodsPublic-ServicesDistributionSocial-WelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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