If war increases weapon production and GDP what may happen to welfare?
Answer and explanation
Correct answer: Welfare may fall due to loss of life and property
The governing concept is that GDP records the value of production but is not a complete measure of welfare. Weapon production can increase measured output, yet war may cause deaths, injuries, destruction of property, insecurity and displacement. These costs can exceed the benefit represented by additional production. Thus option D is correct, while the other choices wrongly assume that higher GDP guarantees welfare.
Frequently asked questions
What is the correct answer to this question?
Welfare may fall due to loss of life and property
Why is this the correct answer?
The governing concept is that GDP records the value of production but is not a complete measure of welfare. Weapon production can increase measured output, yet war may cause deaths, injuries, destruction of property, insecurity and displacement. These costs can exceed the benefit represented by additional production. Thus option D is correct, while the other choices wrongly assume that higher GDP guarantees welfare.
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.
