Page 39 - DECO402_Macro Economics

Macroeconomic Theory

Notes is in creased then economic welfare decreases, but there two matter is not real, only a phobia
because when government is imposed many types of progressive tax an riches then take special
care of this matter that it has not adverse effect on production and investment. On the other
hand when any poor income increas then his endeavour is that he provides good education
for his children and high standard of living. There for we conclude that increasing in national
income, increase economic welfare also, provided that poor’s income not less rather increase
and he improves his standard of living and in same way rich’s income less that production
capacity, investment and capital formation did not reduce.

Notes Non- economic welfare is that part of social welfare which can not be measured
terms of money as a moral welfare.

Self Assessment

Multiple choice questions:
4. Economic welfare is that part of social welfare which can be measured directly or
indirectly—
(a) in money (b) is goods
(c) is person (d) is society
5. Excess working hour and bad Condition will less ___ welfare.
(a) in money (b) non- economic
(c) social (d) none of these
6. Economic welfare can not be ___ of total welfare.
(a) indicater (b) instructor
(c) investor (d) none of there

3.3 National Income as a Measure of Economic Welfare

GNP is not satisfactory measure of economic welfare becomes is the estimation of national income
some services and production activities are not included which affects welfare. Some such a factors
are explain below which effects human welfare, but GNP is not included is estimation.
Leisure – Leisure is an important factor of welfare of society, but it is not inclined is GNP. For instance
excess working hour can less happiness because their leisure is less. Just its contrary, less working hours
per weak increases leisure and makes people happy. Taking more or less leisure, total production of
economy is affected. But in the estimation of national income value of leisure is not taken.
Quality of life - In the estimation of GNP quality of life is not included which reflects society’s welfare.
Life is full of tension in excessive rowdy cities. Much traffic on road which kills time. Accident occurred
daily that make people disabled or courses death life becomes complicated and quality of life falls. On
the other hand such a place where there is no crowd and people enjoy fresh air and nature’s beauty
there quality of life increases. But it is not reflected is GNP also.
Non-market Transactions - Some non- market transactions increases welfare but they are not included
in the estimation of national income. House wife’s service is house and social activities as a religious

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