Why is GDP called an incomplete measure of welfare?
Answer and explanation
Correct answer: Because it does not measure all social and environmental aspects
GDP is a useful measure of market production, but welfare is broader than the value of marketed output. GDP may not adequately show income distribution, unpaid household work, leisure, health, safety, environmental quality, or the enjoyment of public goods. Hence option B is correct. The other options wrongly say GDP measures no production, only population, or is always negative.
Frequently asked questions
What is the correct answer to this question?
Because it does not measure all social and environmental aspects
Why is this the correct answer?
GDP is a useful measure of market production, but welfare is broader than the value of marketed output. GDP may not adequately show income distribution, unpaid household work, leisure, health, safety, environmental quality, or the enjoyment of public goods. Hence option B is correct. The other options wrongly say GDP measures no production, only population, or is always negative.
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.
