If the government increases spending on education what is the likely long-term effect on welfare?
Answer and explanation
Correct answer: Human capital and productivity may rise
Education expenditure can improve people’s knowledge, skills, health awareness, and ability to obtain productive employment. In economic terms, it builds human capital, which can raise labour productivity, future income, and the quality of life over time. The result is not automatic in every case because the quality and access of education matter, but option B gives the most likely long-term effect. The other options are either opposite or unjustifiably certain.
Frequently asked questions
What is the correct answer to this question?
Human capital and productivity may rise
Why is this the correct answer?
Education expenditure can improve people’s knowledge, skills, health awareness, and ability to obtain productive employment. In economic terms, it builds human capital, which can raise labour productivity, future income, and the quality of life over time. The result is not automatic in every case because the quality and access of education matter, but option B gives the most likely long-term effect. The other options are either opposite or unjustifiably certain.
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.
