Question

Assertion: With every increase in the level of GDP, social welfare definitely increases in the economy.

Reason (R): GDP is not a true indicator of the welfare of the economy.

Options

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

Answer 1

Assertion (A) is false, but Reason (R) is true.

Explanation:

GDP is a faulty measure of human welfare; for example, if an increase in GDP is linked to a rise in economic disparity, social welfare may not rise.