In which situation is welfare most likely to rise along with GDP?

Correct answer: Benefits of output are widely shared and the environment remains protected

GDP records the value of production, whereas welfare also depends on distribution, health, safety, leisure and environmental quality. If the gains from higher output are broadly shared and production does not damage the environment, more people can enjoy improved goods and services without equivalent social costs. Thus option D is most likely correct; the other choices describe conditions that can weaken welfare despite GDP growth.