If a country's GDP rises but the number of public libraries and community centres falls, what may happen to social welfare?
Answer and explanation
Correct answer: Social welfare may fall because community opportunities decline
The governing concept is that GDP measures the market value of final goods and services, but it is not a complete measure of welfare. If GDP rises while libraries and community centres decline, people may lose access to education, culture, recreation, and social support. Therefore, welfare may decrease despite higher GDP, making option B correct. Options C and D do not logically follow, while A ignores important non-market services.
Frequently asked questions
What is the correct answer to this question?
Social welfare may fall because community opportunities decline
Why is this the correct answer?
The governing concept is that GDP measures the market value of final goods and services, but it is not a complete measure of welfare. If GDP rises while libraries and community centres decline, people may lose access to education, culture, recreation, and social support. Therefore, welfare may decrease despite higher GDP, making option B correct. Options C and D do not logically follow, while A ignores important non-market services.
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.
