Question

Suppose a nuclear power plant disaster occurs. How could GDP be a "false beacon" in this case?

Answer 1

If there was a nuclear plant disaster, then GDP would be a false beacon because it would account for government spending but not for the pollution caused.

Why would GDP be a false beacon?

Two of the components of GDP are government spending and private investment.

If there is a nuclear plant disaster, either the government will spend a lot to clean it up, or a private company will depending on if the plant is public or private.

GDP would therefore increase.

This would be a false beacon however, because this increase would not take into account the nuclear pollution that would have occurred that would negatively impact future production.

Find out more on the problems with GDP at brainly.com/question/13701371.

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