If total income of a country rises but income distribution remains unequal, which conclusion is correct?
Answer and explanation
Correct answer: The total measure and distribution can be separate questions.
Aggregate national income reports the total income generated in an economy, not how that income is shared. The total may rise while most gains go to a small group and others receive little or no improvement. Therefore, growth in the aggregate must be analysed separately from equality and distribution.
Frequently asked questions
What is the correct answer to this question?
The total measure and distribution can be separate questions.
Why is this the correct answer?
Aggregate national income reports the total income generated in an economy, not how that income is shared. The total may rise while most gains go to a small group and others receive little or no improvement. Therefore, growth in the aggregate must be analysed separately from equality and 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.
