GDP alone can misrepresent welfare because it excludes non-market activities and income distribution.

• A. True
• B. False
• C. Not enough information
• D. Depends on GDP growth rate

Answer: (A)

GDP measures market activity, not welfare. It counts the value of goods and services produced for the market, but it leaves out non-market activities like unpaid household work, caregiving, and volunteer work, and it says nothing about how income is shared among people. Because of these omissions, a country can have rising GDP while real well-being for many residents stays the same or worsens, for example if growth comes from environmentally harmful production or from increasing inequality. So GDP alone can misrepresent welfare, making the statement true.