What limitation arises because GDP does not directly measure leisure time?
Answer and explanation
Correct answer: Quality-of-life assessment may be incomplete
GDP records the monetary value of market production, but leisure is generally a non-market activity and has no direct market price. A person may work longer hours and raise measured output while losing valuable free time. Therefore, GDP growth alone may give an incomplete picture of quality of life and welfare.
Frequently asked questions
What is the correct answer to this question?
Quality-of-life assessment may be incomplete
Why is this the correct answer?
GDP records the monetary value of market production, but leisure is generally a non-market activity and has no direct market price. A person may work longer hours and raise measured output while losing valuable free time. Therefore, GDP growth alone may give an incomplete picture of quality of life and welfare.
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.
