ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In broad terms, an increase in real GDP is interpreted as a sign that the economy is doing well. When real GDP is growing strongly, employment is likely to be increasing as companies hire more workers for their factories and people have more money in their pockets.

Detailed explanation-2: -As an economy grows, so does pollution. However, the two don’t move in lockstep, as a recent Economic Synopses essay shows that pollution increases at a slower rate than economic growth.

Detailed explanation-3: -Overall, economic growth increases environmental pollution emissions, which intensifies as well as inhibits economic growth. The correlation and sustainability of SO2 emissions and GDP are closely related to the regional status of the entire system.

Detailed explanation-4: -The EKC hypothesis argues that an increasing level of GDP would initially increase pollution until a certain level of GDP, at which the level of pollution starts to decrease. The relationship between environmental degradation and economic growth is in the case of the EKC graphically shown as an inverted U-shape.