If GDP rises but people's protection against natural disasters declines how should long-term welfare be assessed?
Answer and explanation
Correct answer: By including risk and possible future losses
The governing concept is sustainable and comprehensive welfare assessment. A rise in GDP records higher current production, but declining disaster protection increases expected future losses of lives, homes, infrastructure and income. Long-term welfare must therefore consider resilience, safety, risk and the sustainability of present gains, rather than GDP alone. Options A, B and C each use only one narrow indicator and ignore future vulnerability.
Frequently asked questions
What is the correct answer to this question?
By including risk and possible future losses
Why is this the correct answer?
The governing concept is sustainable and comprehensive welfare assessment. A rise in GDP records higher current production, but declining disaster protection increases expected future losses of lives, homes, infrastructure and income. Long-term welfare must therefore consider resilience, safety, risk and the sustainability of present gains, rather than GDP alone. Options A, B and C each use only one narrow indicator and ignore future vulnerability.
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.
