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An example of something that would raise GDP yet be undesirable is spending on disaster recovery efforts after a natural disaster, such as rebuilding homes and infrastructure. While these expenditures contribute positively to GDP as they increase economic activity, the underlying destruction and loss of life associated with the disaster represent significant social and economic costs that far outweigh the benefits of increased GDP. Thus, GDP growth in this context does not reflect improvements in overall well-being.

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1mo ago

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