If the quality of government schools improves without an increase in fees what may happen to welfare?
Answer and explanation
Correct answer: Welfare may rise while the change in GDP is limited
The governing concept is that GDP measures the market value of current production, whereas welfare also includes quality, access and human-capital benefits. If government schools become better without charging higher fees, students may gain skills and opportunities even though measured public output changes little. Thus option A is correct; the other choices are absolute or logically unrelated.
Frequently asked questions
What is the correct answer to this question?
Welfare may rise while the change in GDP is limited
Why is this the correct answer?
The governing concept is that GDP measures the market value of current production, whereas welfare also includes quality, access and human-capital benefits. If government schools become better without charging higher fees, students may gain skills and opportunities even though measured public output changes little. Thus option A is correct; the other choices are absolute or logically unrelated.
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.
