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Which change can reduce measured economic welfare without reducing GDP?

Answer and explanation

Correct answer: An increase in pollution

GDP measures the market value of final goods and services, but it does not fully subtract damage from pollution. Pollution can therefore increase while recorded production and GDP stay unchanged, even as health and quality of life worsen. B is correct.

Related tags

Gdp And WelfarePollutionNational Income And Related AggregatesEconomicsClass 11 Mcq

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