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Why may GDP rise when a family replaces home care of an elderly member with a paid care centre?

Answer and explanation

Correct answer: Because an unpaid service becomes a market service

The governing concept is the measurement boundary of GDP: recorded market production is counted, while many unpaid household services are not assigned a market value. Home care by family members may therefore be omitted, but a paid care centre records a service transaction and adds its value to measured output. Hence option C is correct; the other choices do not explain the accounting change.

Related tags

Unpaid CareMarket ServicesGdp MeasurementElderly CareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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