It has been reported that there has been a significant increase in miniscule airborne particles in the major capital cities of India. The particles are so small they can travel deep into a human lung, and from there into the bloodstream. There the toxins can cause respiratory illness, heart attacks and cancer.

Suppose in the next five years there are sharp increases in the assembly of petrol-based vehicles and consumer demand for high-tech air purifiers and anti-pollution masks. Suppose that there is also a substantial increase in government spending on health care as more people visit the doctors due to chest infections.

1. Explain why there is likely to be an increase in India’s measured GDP in this case.
2. Discuss whether GDP is a ‘good’ measure of progress in this case.

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a GDP Consumer consumption government pirchases investment net Exports So in next 5 y... View the full answer