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Which adjustment can bring conventional GDP closer to environmental welfare?

Answer and explanation

Correct answer: Deducting natural resource depletion and pollution costs

The governing concept is green accounting: conventional GDP can rise when production creates pollution or depletes forests, minerals, and other natural capital, even though sustainable welfare may decline. Deducting estimated environmental damage and resource depletion gives a measure closer to net green output, so option A is correct. Double-counting taxes, mishandling imports, or adding used-goods sales would not correct this environmental omission.

Related tags

Green GdpEnvironmental AccountingResource DepletionGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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