If a large part of GDP comes from luxury services while basic health services are weak, what conclusion is appropriate?
Answer and explanation
Correct answer: High GDP does not guarantee broad welfare
The governing concept is that GDP records the monetary value of final output but does not show whether production meets essential needs or reaches all groups. Luxury services may increase GDP, while weak basic health care can restrict living standards and human welfare. Therefore option A is correct. The other options are absolute or contradict the importance of health services; GDP need not automatically fall.
Frequently asked questions
What is the correct answer to this question?
High GDP does not guarantee broad welfare
Why is this the correct answer?
The governing concept is that GDP records the monetary value of final output but does not show whether production meets essential needs or reaches all groups. Luxury services may increase GDP, while weak basic health care can restrict living standards and human welfare. Therefore option A is correct. The other options are absolute or contradict the importance of health services; GDP need not automatically fall.
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.
