How can excluding leisure distort comparisons between countries?
Answer and explanation
Correct answer: The extra welfare of a country with more leisure will not appear despite equal output per capita
The governing concept is that GDP measures the market value of final goods and services, not every source of human welfare. If two countries produce the same output per person but one provides more free time, its residents may enjoy greater utility through rest, family time, or recreation. Because unpaid leisure has no market price, conventional GDP does not record this advantage. Therefore, option B is correct; the other choices confuse leisure with output, exports, or population.
Frequently asked questions
What is the correct answer to this question?
The extra welfare of a country with more leisure will not appear despite equal output per capita
Why is this the correct answer?
The governing concept is that GDP measures the market value of final goods and services, not every source of human welfare. If two countries produce the same output per person but one provides more free time, its residents may enjoy greater utility through rest, family time, or recreation. Because unpaid leisure has no market price, conventional GDP does not record this advantage. Therefore, option B is correct; the other choices confuse leisure with output, exports, or population.
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.
