If GDP rises because people work longer hours but leisure decreases, which limitation of GDP is demonstrated?
Answer and explanation
Correct answer: Ignoring leisure and quality of life
GDP measures the market value of final goods and services produced, but it does not directly measure leisure, happiness, stress, or the distribution of income. Longer working hours may increase recorded output while reducing rest and personal time. Therefore, GDP growth alone cannot provide a complete picture of welfare or quality of life; ignoring leisure is an important limitation of using GDP as a welfare indicator.
Frequently asked questions
What is the correct answer to this question?
Ignoring leisure and quality of life
Why is this the correct answer?
GDP measures the market value of final goods and services produced, but it does not directly measure leisure, happiness, stress, or the distribution of income. Longer working hours may increase recorded output while reducing rest and personal time. Therefore, GDP growth alone cannot provide a complete picture of welfare or quality of life; ignoring leisure is an important limitation of using GDP as a welfare indicator.
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.
