Why does treating national income and economic welfare as identical require caution?
Answer and explanation
Correct answer: National income does not fully show distribution, environment, and non-market activities
National income is an important indicator of economic activity, but it is not a complete measure of welfare. It may rise while income becomes more unequal, environmental damage increases, leisure declines, or unpaid household and community work remains unrecorded. It also does not directly measure health, security, freedom, or quality of life. Therefore C is correct.
Frequently asked questions
What is the correct answer to this question?
National income does not fully show distribution, environment, and non-market activities
Why is this the correct answer?
National income is an important indicator of economic activity, but it is not a complete measure of welfare. It may rise while income becomes more unequal, environmental damage increases, leisure declines, or unpaid household and community work remains unrecorded. It also does not directly measure health, security, freedom, or quality of life. Therefore C is correct.
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.
