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If war increases weapon production and GDP what may happen to welfare?

Answer and explanation

Correct answer: Welfare may fall due to loss of life and property

The governing concept is that GDP records the value of production but is not a complete measure of welfare. Weapon production can increase measured output, yet war may cause deaths, injuries, destruction of property, insecurity and displacement. These costs can exceed the benefit represented by additional production. Thus option D is correct, while the other choices wrongly assume that higher GDP guarantees welfare.

Related tags

WarWeapon ProductionGdp LimitationsHuman WelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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