| GDP of a country as an index of greater well-being of the people of that country may not be correct because |
| 1. many activities in an economy are not evaluated in monetary terms. |
| 2. non-uniform distribution of GDP. |
| 3. the presence of positive or negative externalities affects the actual estimation of GDP. |
| Select the correct answer using the codes given below. |
A) 1 and 2
B) 2 and 3
C) Only 2
D) (d) All of these
Correct Answer: D
Solution :
[d] The rise in GDP mav not ultimately gives the equal distribution of income cause rise in GDP may be concentrated in the hance only few individual or firms. Non-Monetary Exchanges Many activities in an economy are not evaluated in monetary terms. e.g. the domestic services women perform at home are not paid for. Externalities It refers to the benefits (or harms), a firm or an individual causes to one another for which they are not paid (or penalised). Externalities do not have any market in which they can be bought and sold.
You need to login to perform this action.
You will be redirected in
3 sec
