What is the most balanced way to use GDP as a measure of welfare?
Answer and explanation
Correct answer: Studying income distribution, social indicators, environment, and leisure along with real per capita GDP
Real per capita GDP is useful because it adjusts aggregate output for price changes and population size, giving a better indication of average material resources. Nevertheless, it does not show inequality, health, education, environmental damage, unpaid work, or leisure. A balanced welfare assessment therefore combines real per capita GDP with social, distributive, environmental, and quality-of-life indicators. Hence B is correct.
Frequently asked questions
What is the correct answer to this question?
Studying income distribution, social indicators, environment, and leisure along with real per capita GDP
Why is this the correct answer?
Real per capita GDP is useful because it adjusts aggregate output for price changes and population size, giving a better indication of average material resources. Nevertheless, it does not show inequality, health, education, environmental damage, unpaid work, or leisure. A balanced welfare assessment therefore combines real per capita GDP with social, distributive, environmental, and quality-of-life indicators. Hence B is correct.
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.
