Under which condition is current welfare likely to be higher despite equal real GDP?
Answer and explanation
Correct answer: Cleaner environment, better health and more equal distribution
Equal real GDP means that measured real market output is the same, but it does not make all living conditions identical. A cleaner environment, better health services and a more equal distribution can raise people’s effective quality of life and current welfare without increasing recorded output. Option D is therefore correct. The other options describe conditions that generally reduce welfare through pollution, crime, inequality or lost leisure.
Frequently asked questions
What is the correct answer to this question?
Cleaner environment, better health and more equal distribution
Why is this the correct answer?
Equal real GDP means that measured real market output is the same, but it does not make all living conditions identical. A cleaner environment, better health services and a more equal distribution can raise people’s effective quality of life and current welfare without increasing recorded output. Option D is therefore correct. The other options describe conditions that generally reduce welfare through pollution, crime, inequality or lost leisure.
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.
