If a country records higher GDP by increasing military expenditure because of war, which question is most important for civilian welfare?
Answer and explanation
Correct answer: Whether security benefits exceed the human and economic costs of war
GDP records qualifying government production and expenditure, but it does not by itself judge whether that spending improves social welfare. War may create security benefits while also causing deaths, destruction, displacement, and opportunity costs. Therefore, option B asks the relevant net-social-benefit question. A and C concern accounting inclusion, while D is unrelated to the welfare issue.
Frequently asked questions
What is the correct answer to this question?
Whether security benefits exceed the human and economic costs of war
Why is this the correct answer?
GDP records qualifying government production and expenditure, but it does not by itself judge whether that spending improves social welfare. War may create security benefits while also causing deaths, destruction, displacement, and opportunity costs. Therefore, option B asks the relevant net-social-benefit question. A and C concern accounting inclusion, while D is unrelated to the welfare issue.
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.
