A country's GDP rises after a hurricane because of reconstruction spending. What does this reveal about GDP?

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Question

A country's GDP rises after a hurricane because of reconstruction spending. What does this reveal about GDP?

Accepted Answer

That GDP can rise without anyone being better off than before — Award 1 mark. Replacing what was destroyed counts as output but only restores the previous position. It is one of the clearest illustrations of why growth is not development.

Answer

That GDP can rise without anyone being better off than before

Answer

That GDP measures environmental quality

Answer

That the country has become more developed

Answer

That reconstruction always improves quality of life

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