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In a country, a large share of income goes to the top 1% while average GDP per capita rises. Which measure would provide additional welfare information?

Answer and explanation

Correct answer: A distribution measure such as the Gini coefficient

Average GDP per capita can rise even when most households receive little of the additional income. The Gini coefficient and similar distribution measures add information about how unequally income is shared, making welfare analysis more meaningful. Therefore option B is correct. Gross investment and exports describe particular economic activities, while a price index describes price movements; none directly reveals the distribution of income. GDP averages alone can conceal inequality.

Related tags

Gini-CoefficientInequalityGdp-Per-CapitaWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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