If total real GDP remains constant but the average workweek becomes shorter, what is a possible welfare outcome?
Answer and explanation
Correct answer: Welfare may rise because of greater leisure
Real GDP measures the quantity of final production after adjusting for prices, but it does not directly value people’s free time. If the same total output is produced with fewer average working hours, people may obtain more leisure, rest, family time, or personal activities. These benefits can increase life satisfaction even though measured GDP is unchanged. The result is only a possibility, because income distribution, job quality, and the use of additional leisure also matter.
Frequently asked questions
What is the correct answer to this question?
Welfare may rise because of greater leisure
Why is this the correct answer?
Real GDP measures the quantity of final production after adjusting for prices, but it does not directly value people’s free time. If the same total output is produced with fewer average working hours, people may obtain more leisure, rest, family time, or personal activities. These benefits can increase life satisfaction even though measured GDP is unchanged. The result is only a possibility, because income distribution, job quality, and the use of additional leisure also matter.
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.
