If a country's GDP growth mainly comes from rapid exploitation of natural resources, what concern arises?
Answer and explanation
Correct answer: Future productive capacity and welfare may decline
The governing concept is sustainable development: GDP measures marketed output, but it does not by itself guarantee lasting welfare or protect the resource base. Rapid extraction may raise current GDP while depleting resources, damaging ecosystems, and reducing future productive capacity. Hence option A is correct. Availability need not increase, welfare is not certain, and GDP growth does not automatically equalize income.
Frequently asked questions
What is the correct answer to this question?
Future productive capacity and welfare may decline
Why is this the correct answer?
The governing concept is sustainable development: GDP measures marketed output, but it does not by itself guarantee lasting welfare or protect the resource base. Rapid extraction may raise current GDP while depleting resources, damaging ecosystems, and reducing future productive capacity. Hence option A is correct. Availability need not increase, welfare is not certain, and GDP growth does not automatically equalize income.
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.
