If income distribution is perfectly equal and real GDP per capita rises will welfare definitely rise?
Answer and explanation
Correct answer: No because factors such as environment health leisure and freedom may also change
The governing concept is that real GDP per capita is only a partial indicator of welfare. Perfect equality removes the distribution problem, and higher real output may increase access to goods, but welfare also depends on environmental quality, health, leisure, security, freedom, and the quality of goods. Therefore option B is correct; A and C wrongly treat GDP as complete, while D wrongly denies the usefulness of real GDP.
Frequently asked questions
What is the correct answer to this question?
No because factors such as environment health leisure and freedom may also change
Why is this the correct answer?
The governing concept is that real GDP per capita is only a partial indicator of welfare. Perfect equality removes the distribution problem, and higher real output may increase access to goods, but welfare also depends on environmental quality, health, leisure, security, freedom, and the quality of goods. Therefore option B is correct; A and C wrongly treat GDP as complete, while D wrongly denies the usefulness of real GDP.
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.
