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A country's GDP grows rapidly, but the growth is based on excessive exploitation of limited natural resources. What is the concern for long-term welfare?

Answer and explanation

Correct answer: Depletion of natural capital may reduce future production and welfare capacity

Sustainable welfare requires maintaining the productive and ecological assets on which future generations depend. Rapid extraction can increase current GDP, but depletion of forests, minerals, soil, or water may reduce future production capacity and quality of life. Option B states this intertemporal trade-off. A and D deny resource dependence, while C is too narrow because depletion can affect real as well as nominal outcomes.

Related tags

Natural-ResourcesSustainable-DevelopmentNatural-CapitalFuture-WelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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