Why does GDP not provide correct information about income distribution?
Answer and explanation
Correct answer: Because it shows total output and not its distribution among people
GDP is an aggregate measure: it adds the value of production across the economy, but it does not identify which households or groups receive the resulting income. A country may have high GDP with substantial inequality if a large share goes to a small section of society. Option D is correct. The other options misdescribe GDP because it is not restricted to agriculture, imports, or prices alone.
Frequently asked questions
What is the correct answer to this question?
Because it shows total output and not its distribution among people
Why is this the correct answer?
GDP is an aggregate measure: it adds the value of production across the economy, but it does not identify which households or groups receive the resulting income. A country may have high GDP with substantial inequality if a large share goes to a small section of society. Option D is correct. The other options misdescribe GDP because it is not restricted to agriculture, imports, or prices alone.
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.
