If child labour is used to increase production which statement about GDP and welfare is correct?
Answer and explanation
Correct answer: GDP may rise but social welfare may fall
If child labour produces additional market output, the recorded value of that output may increase GDP. However, GDP does not fully subtract the social costs of lost schooling, impaired health, exploitation, and violation of children’s rights. These costs can reduce present and future welfare even when measured production rises. Therefore option D is correct. Option A wrongly assumes that GDP and welfare always move together, while B and C contradict the likely accounting and welfare effects.
Frequently asked questions
What is the correct answer to this question?
GDP may rise but social welfare may fall
Why is this the correct answer?
If child labour produces additional market output, the recorded value of that output may increase GDP. However, GDP does not fully subtract the social costs of lost schooling, impaired health, exploitation, and violation of children’s rights. These costs can reduce present and future welfare even when measured production rises. Therefore option D is correct. Option A wrongly assumes that GDP and welfare always move together, while B and C contradict the likely accounting and welfare effects.
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.
