If GDP remains unchanged but the government provides better education and health services to the poor, what may happen to social welfare?
Answer and explanation
Correct answer: Social welfare may rise
GDP can remain unchanged while the distribution and quality of public services improve. Better schooling and healthcare may expand capabilities, reduce inequality, improve health, and increase opportunities for poor households. These welfare gains are not necessarily shown by a change in total GDP, so D is correct. A is opposite to the likely effect, B is irrelevant, and C wrongly assumes that welfare depends only on aggregate output.
Frequently asked questions
What is the correct answer to this question?
Social welfare may rise
Why is this the correct answer?
GDP can remain unchanged while the distribution and quality of public services improve. Better schooling and healthcare may expand capabilities, reduce inequality, improve health, and increase opportunities for poor households. These welfare gains are not necessarily shown by a change in total GDP, so D is correct. A is opposite to the likely effect, B is irrelevant, and C wrongly assumes that welfare depends only on aggregate output.
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.
