In occurrence of which type of externalities, GDP will underestimate the actual welfare of the economy? Option 1: Negative externalities Option 2: Positive externalities Option 3: Neutral externalities Option 4: No externalities

The answer is 'Positive externalities'. View full solution:

CUET Economics - In occurrence of which type of externalities, GDP will underestimate the actual welfare of the economy? | PYQs + Solutions

CUET Economics 2026 21st May Shift 1

Macro

Easy

Negative externalities

Positive externalities

Neutral externalities

No externalities

✅ Correct Option: 2