What does it indicate if the poverty rate rises along with GDP growth?
Answer and explanation
Correct answer: Benefits of economic growth were not broadly distributed
The key concept is inclusive growth: an economy can produce more while the gains go mainly to higher-income groups or fail to reach vulnerable households. If GDP rises but the poverty rate also rises, average output has increased without sufficient improvement in the position of the poor. Thus, option A is the balanced inference. B contradicts the premise, while C and D are unsupported or false.
Frequently asked questions
What is the correct answer to this question?
Benefits of economic growth were not broadly distributed
Why is this the correct answer?
The key concept is inclusive growth: an economy can produce more while the gains go mainly to higher-income groups or fail to reach vulnerable households. If GDP rises but the poverty rate also rises, average output has increased without sufficient improvement in the position of the poor. Thus, option A is the balanced inference. B contradicts the premise, while C and D are unsupported or false.
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.
