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What problem arises because GDP mainly values goods and services with market prices?

Answer and explanation

Correct answer: Useful unpaid work is ignored

GDP uses monetary market transactions to value final goods and services. Work performed without payment, such as household childcare, cooking, elder care or volunteering, may create real benefits but normally has no recorded market price. It is therefore omitted from measured GDP. Option A is correct. Double counting is a separate accounting error, while options C and D are unrelated to the valuation problem.

Related tags

Non-Market ServicesUnpaid WorkGdp LimitationGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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