Real GDP is considered as an index of ........

Economics (CUET) National Income Accounting

Real GDP is considered as an index of:

price level in the economy.

welfare of the people.

profit maximization.

none of the above.

- Option 1: Price level in the economy.

- Real GDP is adjusted for inflation and reflects the value of goods and services at constant prices, not the price level.

- Option 2: Welfare of the people.

- Real GDP indicates the economic performance and the overall wealth of a country.

- However, it doesn't directly measure individual welfare due to unequal distribution and environmental factors.

- Option 3: Profit maximization.

- Real GDP measures overall economic output, not the profit of individual companies or maximization strategies.

- Option 4: None of the above.

- This dismisses the role of Real GDP in understanding economic health.

The correct option is Option 2: Welfare of the people, as GDP growth is generally associated with improved living standards, despite its limitations.

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