When a state builds a new penitentiary, ________ rise(s), but that does not imply that ________ improve(s).
A) income; welfare
B) GDP; taxes
C) GDP; transfers
D) GDP; welfare
E) taxes; costs

Question

Quizplus · Accepted Answer

Building a new penitentiary will increase GDP as it is a capital investment. However, it does not necessarily improve welfare as more prisons can lead to issues such as overcrowding and mistreatment of inmates, which can have negative social impacts. Therefore, option D is the best choice as it highlights the potential increase in GDP but also acknowledges that it does not necessarily lead to improvements in overall welfare.

When a State Builds a New Penitentiary, ________ Rise(s), but That