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Which indicator helps reveal whether increased national income reached the typical person?

Answer and explanation

Correct answer: Median household income

The governing concept is distribution-sensitive measurement. Total GDP shows the size of economic activity but not who receives the gains. Median household income identifies the income of the middle household after arranging households by income, so it is less distorted by a small number of very rich households. Option B is therefore the best indicator. Total GDP, capital formation, and government consumption do not directly show the typical household’s income.

Related tags

Median IncomeNational IncomeIncome DistributionGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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