Which example shows that GDP growth provides no information about income distribution?
Answer and explanation
Correct answer: All additional income goes to the richest one percent
GDP is an aggregate measure of the value of final goods and services produced; it does not reveal how that income is shared among households. If all additional income from growth goes to the richest one percent, GDP rises but inequality may worsen. Option A is therefore correct. The other choices concern output, prices, or trade and do not directly demonstrate unequal distribution.
Frequently asked questions
What is the correct answer to this question?
All additional income goes to the richest one percent
Why is this the correct answer?
GDP is an aggregate measure of the value of final goods and services produced; it does not reveal how that income is shared among households. If all additional income from growth goes to the richest one percent, GDP rises but inequality may worsen. Option A is therefore correct. The other choices concern output, prices, or trade and do not directly demonstrate unequal 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.
