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If public health improves while private medical spending falls, what may happen to GDP and welfare?

Answer and explanation

Correct answer: Welfare may rise even as private medical spending, and its measured GDP contribution, decline

GDP records market activity, including private medical services. If improved public health reduces the need for private treatment, that spending and its contribution to measured GDP may fall. Yet better health can improve quality of life and productivity, so welfare may rise. Therefore, option D is correct.

Related tags

Public HealthMedical SpendingGdp LimitationsWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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