An increase in real GDP
A) reduces the amount of pollution.
B) corresponds to an increase in leisure.
C) may or may not correspond to an increase in human happiness.
D) means that all people in the country are better off.

Question

Quizplus · Accepted Answer

An increase in real GDP may or may not correspond to an increase in human happiness. While economic growth can provide more jobs, higher incomes, and better goods and services, it may also lead to negative externalities such as pollution and resource depletion. Additionally, GDP per capita does not capture inequality or non-monetary factors that affect well-being, such as social connections, health, and life satisfaction. Therefore, it is possible for some people to be better off while others may be worse off, or for overall happiness to remain unchanged despite a rise in GDP.

An Increase in Real GDP