Which of the following accurately describes an effect of hurricane Katrina on GDP?
A)GDP would decrease reflecting the costs of cleanup.
B)GDP would increase reflecting the costs of cleanup.
C)GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm.
D)GDP would increase well-being.

Question

Quizplus · Accepted Answer

GDP would increase reflecting the costs of cleanup because GDP measures economic activity, including spending on reconstruction and cleanup efforts, even if these activities do not necessarily reflect an increase in overall well-being.

Which of the Following Accurately Describes an Effect of Hurricane