In which situation is welfare most likely to rise along with GDP?
Answer and explanation
Correct answer: Benefits of output are widely shared and the environment remains protected
GDP records the value of production, whereas welfare also depends on distribution, health, safety, leisure and environmental quality. If the gains from higher output are broadly shared and production does not damage the environment, more people can enjoy improved goods and services without equivalent social costs. Thus option D is most likely correct; the other choices describe conditions that can weaken welfare despite GDP growth.
Frequently asked questions
What is the correct answer to this question?
Benefits of output are widely shared and the environment remains protected
Why is this the correct answer?
GDP records the value of production, whereas welfare also depends on distribution, health, safety, leisure and environmental quality. If the gains from higher output are broadly shared and production does not damage the environment, more people can enjoy improved goods and services without equivalent social costs. Thus option D is most likely correct; the other choices describe conditions that can weaken welfare despite GDP growth.
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.
