Which is an example of welfare falling while GDP rises?

Correct answer: Increased output of smoke-emitting factories

GDP can rise when smoke-emitting factories increase their market production, because the goods sold add to measured output. Yet the accompanying pollution can damage health, reduce environmental quality and impose costs on people, causing welfare to fall. Therefore, option A is correct. Clean water, better schools and expanded vaccination generally improve welfare, so they are not the intended example of welfare declining.