Should we take real per capita income as an index of economic welfare?

1.	Should we take real per capita income as an index of economic welfare? If not, why?
Answer» Real per capita income cannot be taken as an index of economic welfare because there are many items and transactions relating to national income that have no connection with real GDP such as production of defence goods. Also it does not take into account any transaction related to illegal activities, black money and production of services for self-consumption. Value : Critical thinking

Should we take real per capita income as an index of economic welfare? If not, why?

Answer»

Real per capita income cannot be taken as an index of economic welfare because there are many items and transactions relating to national income that have no connection with real GDP such as production of defence goods. Also it does not take into account any transaction related to illegal activities, black money and production of services for self-consumption.

Value : Critical thinking

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Should we take real per capita income as an index of economic welfare? If not, why?

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