If GDP increases, welfare will always increase; what kind of statement is this?
Answer and explanation
Correct answer: Incomplete statement
The statement is incomplete because GDP measures the market value of final goods and services, whereas welfare is broader. Welfare may also depend on income distribution, employment quality, pollution, leisure, health, education, public services and non-market activities. Thus, rising GDP can support welfare, but it does not guarantee that every person’s welfare has improved.
Frequently asked questions
What is the correct answer to this question?
Incomplete statement
Why is this the correct answer?
The statement is incomplete because GDP measures the market value of final goods and services, whereas welfare is broader. Welfare may also depend on income distribution, employment quality, pollution, leisure, health, education, public services and non-market activities. Thus, rising GDP can support welfare, but it does not guarantee that every person’s welfare has improved.
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.
