What can be a limitation of national income data in macroeconomics?
Answer and explanation
Correct answer: They may not fully show income distribution and quality of life
National income data are valuable indicators of economic activity, but they do not provide a complete measure of welfare. A high national income may coexist with severe inequality, poverty, pollution, unpaid household work or poor access to health and education. Therefore, distributional and social indicators are also needed for evaluation.
Frequently asked questions
What is the correct answer to this question?
They may not fully show income distribution and quality of life
Why is this the correct answer?
National income data are valuable indicators of economic activity, but they do not provide a complete measure of welfare. A high national income may coexist with severe inequality, poverty, pollution, unpaid household work or poor access to health and education. Therefore, distributional and social indicators are also needed for evaluation.
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.
