[Solved] Which of the following is a limitation of national income data related to environmental factors? — Ans: It ignores the cost of environmental degradation | Economic Awareness

Economic Awareness - Sectors of Indian Economy

Which of the following is a limitation of national income data related to environmental factors?

AIt includes income from illegal activities

BIt ignores the cost of environmental degradation

CIt overestimates informal sector income

DIt adjusts for inflation automatically

Step-by-Step Solution

Step 1: Identify environmental limitations
National income data does not deduct the negative externalities such as pollution or resource depletion caused by economic activities.
Step 2: Analyze options
Ignoring environmental degradation is a known limitation. Income from illegal activities is excluded, informal sector income is underestimated, and inflation adjustment is not automatic.
Final Answer:
It ignores the cost of environmental degradation → Option B
Quick Check:
It ignores the cost of environmental degradation = correct ✅

Quick Trick: Environmental costs are not deducted from GDP.

Common Mistakes:

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