Which of the following directly affects welfare but is not fully measured in GDP?
Answer and explanation
Correct answer: Clean air
GDP mainly records the monetary value of market production and transactions. Clean air improves health, comfort, and quality of life, but its full benefit usually has no directly observed market price and is therefore not completely captured in GDP. Option C is correct. A and B are market-valued activities that can enter measured output, while tax receipts are recorded financial flows rather than an unpriced environmental benefit.
Frequently asked questions
What is the correct answer to this question?
Clean air
Why is this the correct answer?
GDP mainly records the monetary value of market production and transactions. Clean air improves health, comfort, and quality of life, but its full benefit usually has no directly observed market price and is therefore not completely captured in GDP. Option C is correct. A and B are market-valued activities that can enter measured output, while tax receipts are recorded financial flows rather than an unpriced environmental benefit.
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.
