Question

If GDP rises but the additional income is concentrated in the hands of a few individuals or firms, what may happen to the majority?

Options

• The majority will receive all additional income.

• The majority must experience doubled income.

• The majority will always experience higher welfare.

• The majority may become worse off.

Answer 1

A rise in GDP can be concentrated among a few individuals or firms. In that situation, the majority may become worse off because their incomes can fall or fail to improve.