In which situation is a positive relationship between GDP and welfare most likely?
Answer and explanation
Correct answer: When real output, employment, public health, and environmental quality improve together
GDP is more likely to reflect higher welfare when increased real production is accompanied by productive employment, better health, and a healthier environment. These conditions suggest that gains are reaching people and are not being achieved by shifting large costs onto society or future generations. Pollution, inequality, defensive spending, and resource depletion can raise measured output while weakening welfare, so A is the best answer.
Frequently asked questions
What is the correct answer to this question?
When real output, employment, public health, and environmental quality improve together
Why is this the correct answer?
GDP is more likely to reflect higher welfare when increased real production is accompanied by productive employment, better health, and a healthier environment. These conditions suggest that gains are reaching people and are not being achieved by shifting large costs onto society or future generations. Pollution, inequality, defensive spending, and resource depletion can raise measured output while weakening welfare, so A is the best answer.
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.
