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If healthcare spending rises because of a pandemic why does GDP growth alone not prove an improvement in welfare?

Answer and explanation

Correct answer: Because higher spending may result from greater illness

GDP counts paid healthcare services as production, so emergency treatment can increase measured GDP. But the same increase in spending may be caused by more infections, suffering, lost work, and defensive medical care rather than improved health. Hence GDP growth alone cannot establish higher welfare. B is correct; A excludes a counted service, C is an unjustified absolute claim, and D denies the clear welfare importance of health.

Related tags

PandemicHealth SpendingGdp WelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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