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Rapid extraction of a mineral resource raises current GDP. What is the main concern for long-term welfare?

Answer and explanation

Correct answer: Conventional GDP does not fully deduct depletion of natural wealth

GDP records the market value of mineral extraction as current production, but conventional GDP does not fully subtract the loss of the natural asset being depleted. Extraction can therefore raise measured GDP while reducing future productive capacity and harming sustainability. A welfare assessment must consider resource depletion, environmental damage and future generations, so option C is the appropriate conclusion.

Related tags

GdpWelfareResource-DepletionSustainabilityGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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