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Under which condition would real GDP per capita be a relatively better indicator of welfare?

Answer and explanation

Correct answer: When there are no major differences in income distribution, environment, and public services

Real GDP per capita is a limited welfare indicator because it adjusts for prices and population but does not fully measure inequality, environmental quality, leisure, or public services. It becomes relatively more useful for comparing countries when these non-income conditions are broadly similar. Therefore C is correct. A describes conditions that weaken the comparison, B ignores purchasing-power issues, and D substitutes nominal for real output.

Related tags

Real-Gdp-Per-CapitaWelfare-ComparisonLimitationsQuality-Of-LifeGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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