In a country, traffic congestion and commuting time rise sharply along with total output. Why should commuting time be included in welfare analysis?
Answer and explanation
Correct answer: Because loss of time may reduce quality of life, but it is not directly deducted from GDP
GDP measures the market value of produced goods and services, but it does not directly subtract unpaid time lost in congestion, reduced leisure, stress, or fatigue. Thus, output can rise while quality of life and welfare decline. Option B is correct. A is too strong because commuting expenditure may itself support measured production; C and D make unsupported claims about congestion and exports.
Frequently asked questions
What is the correct answer to this question?
Because loss of time may reduce quality of life, but it is not directly deducted from GDP
Why is this the correct answer?
GDP measures the market value of produced goods and services, but it does not directly subtract unpaid time lost in congestion, reduced leisure, stress, or fatigue. Thus, output can rise while quality of life and welfare decline. Option B is correct. A is too strong because commuting expenditure may itself support measured production; C and D make unsupported claims about congestion and exports.
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.
