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Which statement best describes the relationship between GDP and economic welfare?

Answer and explanation

Correct answer: GDP is a useful but incomplete indicator of welfare

GDP is useful because it summarizes the market value of final goods and services produced, providing information about income and material consumption possibilities. It is incomplete because welfare also depends on distribution, unpaid work, environmental quality, leisure, health, education, security, and the quality of goods. Therefore option B gives the balanced conclusion. A is too absolute, while C and D wrongly deny other relevant information.

Related tags

Gdp-IndicatorEconomic-WelfareLimitationsGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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