If real GDP is unchanged but job quality and workplace safety improve what effect on welfare is possible?
Answer and explanation
Correct answer: Welfare may rise because working conditions are not fully measured in GDP
Real GDP records the inflation-adjusted value of market production, not every aspect of people’s well-being at work. Safer workplaces, better job quality, and lower injury risk can increase workers’ satisfaction and security even if output remains unchanged. Thus welfare may rise without a rise in real GDP. Option B is correct; unchanged welfare, falling GDP, or a purely price-level effect does not logically follow from improved safety.
Frequently asked questions
What is the correct answer to this question?
Welfare may rise because working conditions are not fully measured in GDP
Why is this the correct answer?
Real GDP records the inflation-adjusted value of market production, not every aspect of people’s well-being at work. Safer workplaces, better job quality, and lower injury risk can increase workers’ satisfaction and security even if output remains unchanged. Thus welfare may rise without a rise in real GDP. Option B is correct; unchanged welfare, falling GDP, or a purely price-level effect does not logically follow from improved safety.
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.
