Why can welfare be low even when GDP is high?
Answer and explanation
Correct answer: Because pollution, inequality, and leisure may not be fully reflected
GDP measures the market value of final goods and services produced, but it is not a complete measure of human welfare. It may not adequately reflect pollution, environmental damage, unequal distribution of income, unpaid household work, leisure, health, safety, or the quality of life. Consequently, a country can record a high GDP while many people experience poor living conditions or reduced well-being.
Frequently asked questions
What is the correct answer to this question?
Because pollution, inequality, and leisure may not be fully reflected
Why is this the correct answer?
GDP measures the market value of final goods and services produced, but it is not a complete measure of human welfare. It may not adequately reflect pollution, environmental damage, unequal distribution of income, unpaid household work, leisure, health, safety, or the quality of life. Consequently, a country can record a high GDP while many people experience poor living conditions or reduced well-being.
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.
