Question

Is increase in National income an indicator of economic welfare? Comment.​

Answer 1

Hey mate

GDP is also an indicator of human welfare. In cross-country data, GDP per capita is highly correlated with other factors that are important for welfare. In particular, it is positively correlated with life expectancy and negatively correlated with infant mortality and inequality.

Answer 2

Yes, an increase in money is an indicator of the total economic welfare.

• There is a close link between economic welfare and the national income, as both are calculated in the monetary terms.
• Thus, a rise in the national income also gives a rise to economic welfare in an economy.
• Real GDP which is a factor of national income analyses the production volumes.
• An increase in real output determines that the aggregate demand has risen faster than the inflation rates, and thus the economy is experiencing a positive growth, which also depicts a positive economic welfare.