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If total output rises but environmental damage also rises, which limitation of a macroeconomic measure is shown?

Answer and explanation

Correct answer: Total output does not fully show every aspect of welfare

GDP and related output measures record market production, but they do not fully capture environmental degradation, unpaid work, inequality, leisure, or the quality of life. Production may rise while pollution and resource depletion reduce welfare. Therefore macroeconomic aggregates are useful indicators of activity, but they should be supplemented with environmental and social measures.

Related tags

Total-OutputWelfareLimitationsGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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