Does an increase in GDP always show an equal increase in welfare?
Answer and explanation
Correct answer: No, not necessarily
An increase in GDP indicates greater measured production, but it does not automatically mean an equal increase in welfare. Welfare also depends on income distribution, health, leisure, environmental quality, and the nature of the goods produced. For example, output may rise while pollution or inequality worsens. Therefore option B is correct. Options A, C, and D make absolute claims that are not supported by the welfare limitations of GDP.
Frequently asked questions
What is the correct answer to this question?
No, not necessarily
Why is this the correct answer?
An increase in GDP indicates greater measured production, but it does not automatically mean an equal increase in welfare. Welfare also depends on income distribution, health, leisure, environmental quality, and the nature of the goods produced. For example, output may rise while pollution or inequality worsens. Therefore option B is correct. Options A, C, and D make absolute claims that are not supported by the welfare limitations of GDP.
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.
