If worker accidents rise along with output in an economy why may GDP overstate welfare?
Answer and explanation
Correct answer: Because output and treatment spending may be added while pain and loss of life are not fully deducted
GDP records the market value of goods and services, including medical treatment and repair services generated after accidents. It does not subtract pain, reduced quality of life, lost leisure, or the intrinsic cost of injury in a complete way. Thus output and accident-related spending can rise together while welfare falls, making option B correct. A, C, and D contradict how GDP is measured.
Frequently asked questions
What is the correct answer to this question?
Because output and treatment spending may be added while pain and loss of life are not fully deducted
Why is this the correct answer?
GDP records the market value of goods and services, including medical treatment and repair services generated after accidents. It does not subtract pain, reduced quality of life, lost leisure, or the intrinsic cost of injury in a complete way. Thus output and accident-related spending can rise together while welfare falls, making option B correct. A, C, and D contradict how GDP is measured.
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.
