What is the most appropriate conclusion when comparing GDP and human welfare?
Answer and explanation
Correct answer: Social, environmental and distributional factors should also be considered with GDP
GDP is useful because it summarises the market value of production, but human welfare is broader than production alone. A sound comparison should also consider income distribution, employment, health, education, environmental quality, leisure and access to public services. GDP alone is therefore insufficient, while the claim that production has no relation to welfare is also incorrect. Option D gives the balanced conclusion.
Frequently asked questions
What is the correct answer to this question?
Social, environmental and distributional factors should also be considered with GDP
Why is this the correct answer?
GDP is useful because it summarises the market value of production, but human welfare is broader than production alone. A sound comparison should also consider income distribution, employment, health, education, environmental quality, leisure and access to public services. GDP alone is therefore insufficient, while the claim that production has no relation to welfare is also incorrect. Option D gives the balanced conclusion.
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.
