Consider the economic impact of Hurricane Florence in 2018.Which of the following statements is correct?
A)Spending toward reconstruction would lead to an increase in GDP.
B)Increased government spending on relief efforts in the United States would decrease GDP.
C)Damaged buildings and looting would lead to a decrease in GDP.
D)U.S.well-being improves the more reconstruction efforts are needed, following the decline in GDP.

Question

Quizplus · Accepted Answer

Spending on reconstruction efforts will increase economic activity and add to the GDP as money is invested in maintenance and repairs. This would create economic opportunities for the transport and construction industries. Therefore, statement A is correct. Statements B, C, and D are incorrect.

Consider the Economic Impact of Hurricane Florence in 2018