Advertisements
Advertisements
Question
Sale of petrol and diesel cars is rising particularly in big cities. Analyse its impact on gross domestic product and welfare.
Advertisements
Solution
Rising sale of petrol and diesel cars leads to air pollution. This polluted air causes many diseases related to the respiratory system. It affects human health quality which has a negative impact on the welfare of the nation.
Rising sale of petrol and diesel cars means an increase in the demand for a car. So the producers will try to increase the supply of cars to balance with the increasing demand. Hence, this leads to increase in GDP.
APPEARS IN
RELATED QUESTIONS
Define externalities. Give an example of negative externality. What is its impact on welfare?
If the Real GDP is Rs400 and Nominal GDP is Rs450, calculate the Price Index (base = 100).
Write down some of the limitations of using GDP as an index of welfare of a country.
Answer the following question.
Gross Domestic Product (GDP) Does Not Give Us a Clear Indication of Economic Welfare of a Country. "Defend Or Refute the Given Statement with Valid Reason.
Do you agree with the given statement? Give valid reasons in support of your answer.
"Higher Gross Domestic Product (GDP) means greater per capita availability of goods in the economy."
Explain how ‘Non-Monetary Exchanges’ impact the use of Gross Domestic Product as an index of economic welfare.
Discuss briefly the concept of 'Externalities', with suitable example.
State the meanings of the following:
Externalities
Which statement best describes the relationship between GDP and the welfare of a country?
What types of transactions does GDP include?
Why are domestic services performed by women at home excluded from GDP?
What is a barter exchange?
Why does GDP underestimate actual productive activity and welfare in underdeveloped and remote regions?
What are externalities?
Why are externalities not included in GDP?
What is the effect of negative externalities on the measurement of welfare by GDP?
What are positive externalities?
