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Suppose Country A has higher real GDP per capita than Country B but much poorer access to health and education. What is the correct conclusion?

Answer and explanation

Correct answer: Overall welfare cannot be determined from GDP per capita alone

GDP per capita measures average market production or income, but economic welfare is broader. Health, education, environmental quality, leisure, income distribution and access to public services also affect well-being. Thus Country A’s higher real GDP per person does not prove higher welfare, especially when its health and education outcomes are much poorer. Option B is also unjustified because Country B may have substantial welfare.

Related tags

HealthEducationHuman-WelfareGdp-Per-CapitaGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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