The correct answer is Option (1) → (B) and (C) only
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(A) The domestic services that women perform at home are considered in the calculation of GDP. False. Domestic services performed at home are non-market transactions (unpaid) and are not included in the calculation of GDP. This is a major limitation of GDP as a welfare indicator because it ignores productive activity that significantly contributes to well-being. Since the statement claims it is considered, it is an incorrect statement about GDP calculation.
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(B) Harmful effects caused due to carbon emissions from factory production are not counted as GDP. True. GDP counts the market value of the output (the factory's product) but does not subtract the negative consequences, like pollution and environmental damage (known as negative externalities). This is a limitation of GDP, as a higher GDP achieved through greater pollution reduces overall welfare.
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(C) The rise in GDP may be concentrated in the hands of very few individuals or firms. True. GDP does not account for the distribution of income. A high GDP can coexist with high income inequality, meaning the rise in wealth benefits only a small segment of the population, which does not translate into higher welfare for the majority. This is a limitation of GDP as a welfare indicator.
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(D) Higher levels of GDP always ensure higher welfare. False. As shown by statements (B) and (C), a higher GDP does not always ensure higher welfare. Factors like pollution, income inequality, and the exclusion of non-market activities mean that GDP is an imperfect measure of welfare.
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