Which comparison is especially affected because GDP excludes the value of leisure time?
Answer and explanation
Correct answer: Comparison of countries with equal output but different average working hours
Leisure is a non-market component of well-being and usually has no recorded market price in GDP. Two countries may produce the same measured output while their citizens work very different numbers of hours; the country with more free time may enjoy greater welfare even though GDP is equal. Therefore, equal-output comparisons with different working hours are particularly incomplete, making A correct.
Frequently asked questions
What is the correct answer to this question?
Comparison of countries with equal output but different average working hours
Why is this the correct answer?
Leisure is a non-market component of well-being and usually has no recorded market price in GDP. Two countries may produce the same measured output while their citizens work very different numbers of hours; the country with more free time may enjoy greater welfare even though GDP is equal. Therefore, equal-output comparisons with different working hours are particularly incomplete, making A 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.
