Which conclusion is correct if income growth remains limited to the richest group?
Answer and explanation
Correct answer: Total GDP may rise without broad welfare improvement
GDP or aggregate income can increase even when the additional income goes mainly to a small wealthy group. This raises the total but does not prove that poorer households gained, poverty fell, or inequality narrowed. Hence option B is correct. Options A, C, and D incorrectly assume equal benefits, elimination of poverty, or equal income without evidence about distribution.
Frequently asked questions
What is the correct answer to this question?
Total GDP may rise without broad welfare improvement
Why is this the correct answer?
GDP or aggregate income can increase even when the additional income goes mainly to a small wealthy group. This raises the total but does not prove that poorer households gained, poverty fell, or inequality narrowed. Hence option B is correct. Options A, C, and D incorrectly assume equal benefits, elimination of poverty, or equal income without evidence about distribution.
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.
