social welfare may not increase even real GDP increases explain
Dear student
when in an economy there is increase of real GDP it doesn't mean that it will result to increase in social welfare too. there are number of factors which effect the social welfare like composition of GNP and distribution of GNP among people.following are the points which explain or shows that increase in real GDP not necessary leads to social welfare:
1) there may be high income but due to high prices , people are not able to enjoy the high standard of living.
2) with increase in national income, there will be rise in industrialisation or urbanisation which leads to pollution in the air, pollutes the water and make noise pollution too. Industrialisation and urbanisation can increase the national income but some how it deteriorating the environment too. which cause harmful for the general public.
3) A country may have high national income but the income is consumed by the increasing population, so that the level of people's well being (welfare) remains low.
Regards
when in an economy there is increase of real GDP it doesn't mean that it will result to increase in social welfare too. there are number of factors which effect the social welfare like composition of GNP and distribution of GNP among people.following are the points which explain or shows that increase in real GDP not necessary leads to social welfare:
1) there may be high income but due to high prices , people are not able to enjoy the high standard of living.
2) with increase in national income, there will be rise in industrialisation or urbanisation which leads to pollution in the air, pollutes the water and make noise pollution too. Industrialisation and urbanisation can increase the national income but some how it deteriorating the environment too. which cause harmful for the general public.
3) A country may have high national income but the income is consumed by the increasing population, so that the level of people's well being (welfare) remains low.
Regards