Average income rose in a country but the number of homeless people also increased. What does this imply?
Answer and explanation
Correct answer: Distribution and housing problems may remain serious despite average growth
The governing concept is the limitation of averages as welfare indicators. Average income can rise because gains go mainly to higher-income groups, while poor households may face high rents, unemployment, or inadequate housing. Thus option C is correct: distribution and housing conditions may worsen even when the average improves. The other choices make unjustified claims about everyone, measurement, or income accuracy.
Frequently asked questions
What is the correct answer to this question?
Distribution and housing problems may remain serious despite average growth
Why is this the correct answer?
The governing concept is the limitation of averages as welfare indicators. Average income can rise because gains go mainly to higher-income groups, while poor households may face high rents, unemployment, or inadequate housing. Thus option C is correct: distribution and housing conditions may worsen even when the average improves. The other choices make unjustified claims about everyone, measurement, or income accuracy.
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.
