Why is per capita GDP considered a better indicator of welfare?
Answer and explanation
Correct answer: It indicates average output or income
Per capita GDP is calculated as total GDP divided by population: per capita GDP = GDP ÷ population. It estimates the average output or income available per person and is therefore more informative than total GDP when countries have different population sizes. Option A is correct. It is not perfect because an average does not show inequality, pollution, unpaid work or the quality of public services.
Frequently asked questions
What is the correct answer to this question?
It indicates average output or income
Why is this the correct answer?
Per capita GDP is calculated as total GDP divided by population: per capita GDP = GDP ÷ population. It estimates the average output or income available per person and is therefore more informative than total GDP when countries have different population sizes. Option A is correct. It is not perfect because an average does not show inequality, pollution, unpaid work or the quality of public services.
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.
