GDP increased in a country but unemployment also rose. What does this imply?
Answer and explanation
Correct answer: Benefits of growth may not have reached everyone
GDP is an aggregate measure of production, not a guarantee that every person receives income or employment. If GDP rises while unemployment also increases, the expansion may be concentrated in capital-intensive sectors, may use fewer workers, or may distribute gains unevenly. Hence option C is correct: growth may be jobless or insufficiently inclusive. The other options incorrectly assume that aggregate growth automatically benefits everyone or that the measurement must be wrong.
Frequently asked questions
What is the correct answer to this question?
Benefits of growth may not have reached everyone
Why is this the correct answer?
GDP is an aggregate measure of production, not a guarantee that every person receives income or employment. If GDP rises while unemployment also increases, the expansion may be concentrated in capital-intensive sectors, may use fewer workers, or may distribute gains unevenly. Hence option C is correct: growth may be jobless or insufficiently inclusive. The other options incorrectly assume that aggregate growth automatically benefits everyone or that the measurement must be wrong.
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.
