Why can two countries with equal GDP have different welfare levels?
Answer and explanation
Correct answer: Population, income distribution, and public services may differ
Equal total GDP only means that the two economies have the same measured aggregate output, subject to comparable valuation. It does not imply equal population, per-person output, income distribution, environmental quality, or access to health and education services. A country with a smaller population or better public services may provide higher average welfare. Therefore option D is correct, while A, B, and C make unsupported claims of equality.
Frequently asked questions
What is the correct answer to this question?
Population, income distribution, and public services may differ
Why is this the correct answer?
Equal total GDP only means that the two economies have the same measured aggregate output, subject to comparable valuation. It does not imply equal population, per-person output, income distribution, environmental quality, or access to health and education services. A country with a smaller population or better public services may provide higher average welfare. Therefore option D is correct, while A, B, and C make unsupported claims of equality.
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.
