If output growth raises average income but also widens the rural-urban income gap, what is the concern?
Answer and explanation
Correct answer: Rising regional inequality
Average income is an aggregate measure and can increase even when the gains from growth are concentrated in particular areas or groups. A widening rural-urban income gap indicates that rural residents are receiving fewer benefits relative to urban residents. This is regional inequality and may reduce inclusive welfare. Option D is correct; the other choices contradict the stated gap or are unrelated to income distribution.
Frequently asked questions
What is the correct answer to this question?
Rising regional inequality
Why is this the correct answer?
Average income is an aggregate measure and can increase even when the gains from growth are concentrated in particular areas or groups. A widening rural-urban income gap indicates that rural residents are receiving fewer benefits relative to urban residents. This is regional inequality and may reduce inclusive welfare. Option D is correct; the other choices contradict the stated gap or are unrelated to income distribution.
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.
