Because pollution reduces economic welfare, on this count real GDP as measured
A) decreases as pollution increases.
B) increases to take into account the expenditures that will be made in the future to clean up the pollution.
C) overstates economic welfare.
D) understates economic welfare.

Question

Quizplus · Accepted Answer

Real GDP overstates economic welfare when it does not account for the negative effects of pollution, as it only measures the market value of goods and services produced, not the environmental costs.

Because Pollution Reduces Economic Welfare, on This Count Real GDP