If life expectancy and literacy rise while real GDP remains constant, what can be said?
Answer and explanation
Correct answer: Broader human welfare may rise even if real GDP is unchanged
Real GDP measures the value of output at constant prices, but welfare has several dimensions beyond market production. Longer life expectancy indicates improved health, while higher literacy reflects better educational capability and opportunities. These improvements can raise human welfare even when measured real GDP is unchanged. Therefore GDP is useful but incomplete as a welfare indicator, making option A correct.
Frequently asked questions
What is the correct answer to this question?
Broader human welfare may rise even if real GDP is unchanged
Why is this the correct answer?
Real GDP measures the value of output at constant prices, but welfare has several dimensions beyond market production. Longer life expectancy indicates improved health, while higher literacy reflects better educational capability and opportunities. These improvements can raise human welfare even when measured real GDP is unchanged. Therefore GDP is useful but incomplete as a welfare indicator, making option A correct.
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.
