Which option correctly shows a limitation of GDP?
Answer and explanation
Correct answer: GDP does not show income distribution
GDP measures the market value of final goods and services produced within an economy, but it does not show how the resulting income is distributed among households. A country may have a high GDP while a large share of income goes to a small group. Consequently, GDP alone cannot fully describe equality, poverty, or overall economic welfare. Option A states this limitation correctly.
Frequently asked questions
What is the correct answer to this question?
GDP does not show income distribution
Why is this the correct answer?
GDP measures the market value of final goods and services produced within an economy, but it does not show how the resulting income is distributed among households. A country may have a high GDP while a large share of income goes to a small group. Consequently, GDP alone cannot fully describe equality, poverty, or overall economic welfare. Option A states this limitation correctly.
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.
