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What may happen to measured GDP if food prepared at home is purchased from the market instead?

Answer and explanation

Correct answer: It may rise because a market transaction is recorded

GDP measures the market value of final goods and services produced during a period. Food prepared at home is usually an unpaid household activity and is not separately counted, whereas buying prepared food creates a recorded market transaction. Thus measured GDP may rise even if the physical meal is similar. Option B is correct; the change is not inevitable, GDP does not become zero, and the transaction is related to measured production.

Related tags

Measured GdpMarket TransactionHome ProductionNational AccountsGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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