A country's total real income rises but the median income of citizens falls. What does this indicate?
Answer and explanation
Correct answer: Income growth may be concentrated among top-income groups
The governing concept is that aggregate income and its distribution are different dimensions of economic welfare. If total real income increases while median income falls, the gains are likely concentrated among higher-income households, while the typical citizen becomes worse off. Therefore, option B is correct. Option A is too absolute; options C and D do not follow from the information given.
Frequently asked questions
What is the correct answer to this question?
Income growth may be concentrated among top-income groups
Why is this the correct answer?
The governing concept is that aggregate income and its distribution are different dimensions of economic welfare. If total real income increases while median income falls, the gains are likely concentrated among higher-income households, while the typical citizen becomes worse off. Therefore, option B is correct. Option A is too absolute; options C and D do not follow from the information given.
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.
