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What happens to measured GDP if a person leaves a paid job and performs the same service unpaid at home?

Answer and explanation

Correct answer: It may fall

GDP mainly records market production valued through monetary transactions. When a person provides a service in a paid job, the payment is counted as market output and income. If the identical service is moved to unpaid household work, it is generally not recorded in GDP, even though the real service and possible welfare benefit remain. Thus measured GDP may fall, making option C correct; it need not double or remain unchanged.

Related tags

Paid ServiceUnpaid Household WorkGdp MeasurementGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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