If improved public transport reduces private vehicle fuel sales, what is possible?
Answer and explanation
Correct answer: Some GDP sales may fall while welfare rises through time savings and lower pollution
GDP counts market transactions, not every improvement in quality of life. Better public transport may reduce fuel purchases and some related sales, but it can save commuting time, lower congestion and reduce pollution. These benefits may raise welfare even if a particular component of measured GDP falls. Option B captures both effects; A assumes welfare follows one sale, while C and D are factually incorrect.
Frequently asked questions
What is the correct answer to this question?
Some GDP sales may fall while welfare rises through time savings and lower pollution
Why is this the correct answer?
GDP counts market transactions, not every improvement in quality of life. Better public transport may reduce fuel purchases and some related sales, but it can save commuting time, lower congestion and reduce pollution. These benefits may raise welfare even if a particular component of measured GDP falls. Option B captures both effects; A assumes welfare follows one sale, while C and D are factually incorrect.
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.
