Excessive exploitation of natural resources may raise current GDP. What may be its effect on future welfare?
Answer and explanation
Correct answer: Future welfare may decline
The governing idea is sustainable development: present production should not destroy the resource base needed by future generations. Excessive extraction can deplete forests, minerals and water, reduce future productive capacity, and create pollution or ecological damage. These costs may not be fully reflected in current GDP, so future welfare can fall. Option D is correct; the words “may decline” appropriately allow for uncertainty and possible conservation responses.
Frequently asked questions
What is the correct answer to this question?
Future welfare may decline
Why is this the correct answer?
The governing idea is sustainable development: present production should not destroy the resource base needed by future generations. Excessive extraction can deplete forests, minerals and water, reduce future productive capacity, and create pollution or ecological damage. These costs may not be fully reflected in current GDP, so future welfare can fall. Option D is correct; the words “may decline” appropriately allow for uncertainty and possible conservation responses.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
