Why may broad welfare remain limited if output growth mainly consists of goods bought only by high-income groups?
Answer and explanation
Correct answer: Because the composition of output does not meet the needs of the majority
The governing concept is that the composition and distribution of output matter for welfare, not merely its total value. If growth is concentrated in luxury goods purchased by rich households, most people may receive little benefit and basic needs may remain unmet. Therefore option B is correct. Final goods are not excluded from GDP, and the question gives no basis for claims about population or imports.
Frequently asked questions
What is the correct answer to this question?
Because the composition of output does not meet the needs of the majority
Why is this the correct answer?
The governing concept is that the composition and distribution of output matter for welfare, not merely its total value. If growth is concentrated in luxury goods purchased by rich households, most people may receive little benefit and basic needs may remain unmet. Therefore option B is correct. Final goods are not excluded from GDP, and the question gives no basis for claims about population or imports.
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.
