When will the positive relationship between GDP and economic welfare be stronger?
Answer and explanation
Correct answer: When useful output rises and benefits are broadly distributed
GDP is more likely to reflect economic welfare when its increase represents useful goods and services and the resulting gains reach a broad share of the population. Thus A is correct. Rising pollution, greater inequality, reduced leisure, or spending caused by accidents can raise measured GDP while weakening quality of life, so B, C, and D do not strengthen the relationship.
Frequently asked questions
What is the correct answer to this question?
When useful output rises and benefits are broadly distributed
Why is this the correct answer?
GDP is more likely to reflect economic welfare when its increase represents useful goods and services and the resulting gains reach a broad share of the population. Thus A is correct. Rising pollution, greater inequality, reduced leisure, or spending caused by accidents can raise measured GDP while weakening quality of life, so B, C, and D do not strengthen the relationship.
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.
