Why is it not appropriate to compare the welfare of two countries using only total GDP?
Answer and explanation
Correct answer: Because their population and income distribution may differ
Total GDP shows the size of an economy, but it does not show how much output is available per person or how income is shared. Two countries can have similar total GDP while differing greatly in population, per-capita income and inequality. Welfare also depends on health, education, security and the environment. Therefore, option D is correct; total GDP alone is insufficient for welfare comparison.
Frequently asked questions
What is the correct answer to this question?
Because their population and income distribution may differ
Why is this the correct answer?
Total GDP shows the size of an economy, but it does not show how much output is available per person or how income is shared. Two countries can have similar total GDP while differing greatly in population, per-capita income and inequality. Welfare also depends on health, education, security and the environment. Therefore, option D is correct; total GDP alone is insufficient for welfare comparison.
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.
