In which situation can environmental welfare rise without a fall in GDP?
Answer and explanation
Correct answer: Cleaner technology is adopted in production
Environmental welfare can improve when production becomes less polluting without necessarily reducing the quantity or value of output. Cleaner technology may lower emissions, waste, and resource damage while firms continue producing the same or even greater output. Thus GDP need not fall when environmental quality improves. Option D expresses this possibility. Increasing coal use, deforestation, or open dumping generally damages environmental welfare and therefore cannot provide the stated improvement.
Frequently asked questions
What is the correct answer to this question?
Cleaner technology is adopted in production
Why is this the correct answer?
Environmental welfare can improve when production becomes less polluting without necessarily reducing the quantity or value of output. Cleaner technology may lower emissions, waste, and resource damage while firms continue producing the same or even greater output. Thus GDP need not fall when environmental quality improves. Option D expresses this possibility. Increasing coal use, deforestation, or open dumping generally damages environmental welfare and therefore cannot provide the stated improvement.
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.
