economics hard MCQ

The 'Environmental Kuznets Curve' hypothesizes that as an economy develops, environmental degradation initially increases, but after reaching a certain level of income, it eventually:

  1. Continues to increase exponentially
  2. Stabilizes and remains constant
  3. Decreases as society demands cleaner environments and adopts better technologies
  4. Fluctuates randomly with business cycles

Answer: Decreases as society demands cleaner environments and adopts better technologies

The EKC suggests an inverted-U shaped relationship between income per capita and pollution. In early industrialization, growth prioritizes output over ecology. However, as nations become wealthier, citizens demand higher environmental standards, and the economy shifts toward services and clean technologies, leading to a reduction in environmental degradation.

Topic Macroeconomics - Curves
Exam Relevance UPSC Prelims, SSC CGL