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      Question

      Which of the following statement is correct about the

      situation in the economy?
      A If national income rises, per capita income must also increase Correct Answer Incorrect Answer
      B If population rises, per capita income must fall Correct Answer Incorrect Answer
      C If national income rises, welfare of people must rise Correct Answer Incorrect Answer
      D None of the above Correct Answer Incorrect Answer

      Solution

      None of the above situation is necessary to happen in an economy: · an increase in national income will not lead to rise in per capita income if the population increases at a higher pace than the national income · conversely, if increase in population is less than the increase in national income, the per capital income will not fall but will rather increase · the welfare of the people depends not only on increase in national income but also on the distribution of the national income

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