Home › Karnataka PUC II › economics › national_income_accounting › GDP and welfare are NOT identical because GDP
GDP and welfare are NOT identical because GDP
ACounts only renewable resources
BAlready includes negative externalities like pollution
CTreats non-marketed services (household chores by women) and ignores income distribution / non-monetary welfare components
DAlways includes the underground economy
Answer & Solution
Correct answer: C. Treats non-marketed services (household chores by women) and ignores income distribution / non-monetary welfare components
Higher GDP need not mean higher welfare: GDP misses non-market services, ignores distribution, counts environmental damage neutrally or even positively (clean-up spending), and excludes the underground economy.
Related questions
Why is NNP at FACTOR COST (rather than at market prices) called the National Income?If GDP at market prices = ₹500, depreciation = ₹50, net indirect taxes = ₹40, NFIA = ₹10, Which equation correctly states the EXPENDITURE method of GDP at market prices?Which is a TRANSFER payment in the macroeconomic framework?Personal Disposable Income (PDI) equalsIf NDP at factor cost is ₹100 lakh and net indirect taxes are ₹15 lakh, NDP at market pricWhich of the following is INCLUDED in GDP?The Value-Added Method calculates national income by