A country has higher real GDP per capita but very low political freedom and personal security. Which statement is correct?
Answer and explanation
Correct answer: Non-income factors such as freedom and security may reduce overall welfare
The governing concept is that welfare is multidimensional. Real GDP per capita indicates average purchasing power or production, but it does not fully measure political rights, personal safety, dignity, equality, or freedom from fear. Consequently, high income cannot automatically establish high welfare. Option B is correct; A overstates the power of income, C denies an important welfare factor, and D falsely claims complete GDP coverage.
Frequently asked questions
What is the correct answer to this question?
Non-income factors such as freedom and security may reduce overall welfare
Why is this the correct answer?
The governing concept is that welfare is multidimensional. Real GDP per capita indicates average purchasing power or production, but it does not fully measure political rights, personal safety, dignity, equality, or freedom from fear. Consequently, high income cannot automatically establish high welfare. Option B is correct; A overstates the power of income, C denies an important welfare factor, and D falsely claims complete GDP coverage.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
