If both real GDP and per capita GDP rise but the poverty rate does not fall, what does it indicate?
Answer and explanation
Correct answer: Growth benefits did not sufficiently reach poorer groups
Real GDP measures inflation-adjusted output, while per capita GDP expresses that output as an average per person. Neither measure proves that poorer households received a meaningful share of the gains. If both indicators rise but the poverty rate remains unchanged, growth may be concentrated among higher-income groups or may not create sufficient income opportunities for the poor. Hence option B is correct; C and D contradict the evidence.
Frequently asked questions
What is the correct answer to this question?
Growth benefits did not sufficiently reach poorer groups
Why is this the correct answer?
Real GDP measures inflation-adjusted output, while per capita GDP expresses that output as an average per person. Neither measure proves that poorer households received a meaningful share of the gains. If both indicators rise but the poverty rate remains unchanged, growth may be concentrated among higher-income groups or may not create sufficient income opportunities for the poor. Hence option B is correct; C and D contradict the evidence.
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.
