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Question : 10
Total: 21
"Gross Domestic Product (GDP) as an indicator of welfare loses its significance if the distribution of income turns unequal." Justify the given statement with valid reason.
Solution:
Yes, this statement is absolutely true. A mere rise in GDP may not lead to a rise in economic welfare. It is significant only when distribution is equal. If it is not equally distributed, It will make the rich richer and the poor poorer. So, this indicator does not fit in the case when distribution is unequal.
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