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What problem arises because GDP does not fully show environmental damage?

Answer and explanation

Correct answer: Welfare may fall even when GDP rises

Production may increase GDP while factories, traffic, or resource extraction create pollution, health risks, and ecological loss. GDP records the value of marketed output but does not fully deduct these environmental costs. Consequently, measured GDP can rise even when people’s overall welfare declines.

Related tags

EconomicsGdpEnvironmentWelfareSustainable DevelopmentGdp And WelfareNational Income And Related AggregatesClass 11 Mcq

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