If output growth gives people more goods but mental stress also rises sharply what is the welfare conclusion?
Answer and explanation
Correct answer: The welfare effect is uncertain and both sides must be considered
The governing concept is that welfare is multidimensional. More goods can increase material consumption and convenience, but sharply higher mental stress can reduce health, leisure, relationships and overall quality of life. Without measuring the relative size of these benefits and costs, welfare cannot be declared definitely higher or lower. Therefore D is correct. Option C is also wrong because GDP may be correctly measuring output while remaining incomplete as a welfare measure.
Frequently asked questions
What is the correct answer to this question?
The welfare effect is uncertain and both sides must be considered
Why is this the correct answer?
The governing concept is that welfare is multidimensional. More goods can increase material consumption and convenience, but sharply higher mental stress can reduce health, leisure, relationships and overall quality of life. Without measuring the relative size of these benefits and costs, welfare cannot be declared definitely higher or lower. Therefore D is correct. Option C is also wrong because GDP may be correctly measuring output while remaining incomplete as a welfare measure.
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.
