Question

Suppose a ban is imposed on consumption of liquor in the country. Examine the effect on (a) Gdp of the country (b)welfare​

Answer 1

Following are the effects of ban on consumption of liquor in the country .

1. Gross domestic product :If a ban is imposed on the consumption of liquor , gross domestic product will will be adversely affected atleast in short run . Alcohol industry is one of the biggest industries. It would result in problem of unemployment and decline in tourism . The sale of liquor contributes to the economy through tax to the government.

2. Welfare-It a ban is imposed on consumption of liquor , welfare of the country would improve . A number of social problems originate from the consumption pf liquor , there would be a decline in number of accidents ,rapes and murders.

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