Consider the following statements 1 Use of public parks increases welfare 2 Distribution of GDP incr...........

Introductory Macro Economics National Income Accounting

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Consider the following statements:

(1) Use of public parks increases welfare

(2) Distribution of GDP increases welfare

(3) Higher GDP always cause higher welfare

Which of the above statements are false?

Only 1

Only 2

Only 3

1 and 3

Explanation:

Option (3) is correct.
Explanation: In general, Real GDP and Welfare are directly related with each other. A higher GDP implies more production of goods and services. It means more availability of goods and services. But more goods and services may not necessarily indicate that the people were better off during the year. In other words, a higher GDP may not necessarily mean higher welfare of the people.

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