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Why may the imputed rent of an owner-occupied house be added to GDP?

Answer and explanation

Correct answer: Because the house provides housing services

National accounts aim to value current production of services, including housing services. When owners live in their own houses, no rent is actually paid, but the house still provides accommodation that could otherwise be rented in the market. An estimated or imputed rent represents the value of this current housing service and may be included in GDP. Thus option A is correct; ownership, imports, used housing, and transfers do not provide the reason.

Related tags

Imputed RentHousing ServicesNational AccountsGdpGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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