Question

Elaborate the likely impact of construction of two new Express Highways on the Gross Domestic Product (GDP) and Welfare in an economy.

Hint:

Infrastructure projects like highways boost both GDP through investment and employment, and welfare through improved connectivity and services.

Answer 1

The construction of two new Express Highways will have the following likely impacts:
Impact on Gross Domestic Product (GDP): The construction activity will contribute directly to the GDP by increasing Gross Capital Formation. It will generate employment opportunities and increase the income of workers, suppliers, and contractors. This will enhance overall production and demand in the economy, thereby boosting the GDP.
Impact on Welfare: Improved road infrastructure will reduce travel time and transportation costs, improving connectivity and accessibility. It will facilitate faster movement of goods and people, enhance trade, and contribute to better health, education, and employment opportunities in the connected areas, thereby improving the overall welfare and standard of living of the people.