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Which option is the correct criticism regarding GDP and the environment?

Answer and explanation

Correct answer: GDP does not fully reflect the depletion of natural resources

GDP records the market value of current production, but it does not automatically deduct the loss of forests, minerals, biodiversity, or environmental quality caused by production. Consequently, GDP may rise even while natural capital is being depleted and pollution is increasing. It is therefore not a complete measure of sustainable economic welfare.

Related tags

Gdp And WelfareEnvironmentNatural Resource DepletionSustainable DevelopmentNational Income And Related AggregatesEconomicsClass 11 Mcq

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