If GDP rises but personal safety and civil freedom decline, what is the conclusion?
Answer and explanation
Correct answer: Non-economic welfare may decline
The governing concept is that GDP measures the market value of final goods and services, not every dimension of human welfare. Therefore, rising GDP can indicate greater economic output while declining safety and civil freedom reduce quality of life. Option D is correct because non-economic welfare may fall. Option A wrongly assumes GDP captures all welfare, while B denies an important welfare connection and C does not follow.
Frequently asked questions
What is the correct answer to this question?
Non-economic welfare may decline
Why is this the correct answer?
The governing concept is that GDP measures the market value of final goods and services, not every dimension of human welfare. Therefore, rising GDP can indicate greater economic output while declining safety and civil freedom reduce quality of life. Option D is correct because non-economic welfare may fall. Option A wrongly assumes GDP captures all welfare, while B denies an important welfare connection and C does not follow.
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.
